Natalie Balzert
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ECON 103 Quiz on ECON 103 Exam#2, created by Natalie Balzert on 07/11/2016.

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Natalie Balzert
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ECON 103 Exam#2

Question 1 of 50

1

Aggregate Supply represents:

Select one of the following:

  • total expenditure in the economy

  • total production in the economy

  • total of all wages paid in the economy

  • a and b only

  • a, b, and c

Explanation

Question 2 of 50

1

Fill the blank spaces to complete the text.

Two other names for the LRAS is , .

Explanation

Question 3 of 50

1

An oil price decrease in the US should shift:

Select one of the following:

  • aggregate demand to the left

  • aggregate supply to the left

  • aggregate demand to the right

  • aggregate supply to the right

Explanation

Question 4 of 50

1

An oil price decrease in the US should increase prices and lower Real GPD.

Select one of the following:

  • True
  • False

Explanation

Question 5 of 50

1

An increase in the money supply would shift:

Select one of the following:

  • aggregate demand to the left

  • aggregate supply to the left

  • aggregate demand to the right

  • aggregate supply to the right

Explanation

Question 6 of 50

1

A government budget cut would shift:

Select one of the following:

  • aggregate demand to the left

  • aggregate supply to the left

  • aggregate demand to the right

  • aggregate supply yo the right

Explanation

Question 7 of 50

1

A government budget cut would:

Select one of the following:

  • increase prices and lower Real GDP

  • increase prices and raise Real GDP

  • decrease prices and lower Real GDP

  • decease prices and raise Real GDP

Explanation

Question 8 of 50

1

An increase in US imports would:

Select one of the following:

  • increase prices and lower Real GDP

  • Increase prices and raise Real GDP

  • decrease prices and lower Real GDP

  • decrease prices and raise Real GDP

Explanation

Question 9 of 50

1

In a Classical view of the world, what factor makes savings equal to investment?

Select one of the following:

  • wages

  • interest rates

  • neither a or b

  • a and b together

Explanation

Question 10 of 50

1

Classical economists believe the government never should try to balance the economy, it is better left alone.

Select one of the following:

  • True
  • False

Explanation

Question 11 of 50

1

Say's Law is:

Select one of the following:

  • good money drives bad money out of the circulation

  • production creates the income necessary to buy everything produced

  • prices must adjust so that all goods produced are sold

  • equilibrium always exists

Explanation

Question 12 of 50

1

Classical economists believe that in the long run, whether or not there is unemployment is determined solely by aggregate supply, not aggregate demand.

Select one of the following:

  • True
  • False

Explanation

Question 13 of 50

1

If my wage was $10 per hour and bread cost $2.50 per loaf last month and this month my wage is $9 per month and bread costs $3 per loaf, my nominal wage has fallen and my real wage has risen.

Select one of the following:

  • True
  • False

Explanation

Question 14 of 50

1

Fill the blank space to complete the text.

was the person who believed that population growth would outpace the food supply.

Explanation

Question 15 of 50

1

A recessionary gap would be eliminated, according to Classical economists:

Select one of the following:

  • only through government spending and taxing changes

  • because wages fall, without any government spending action

  • because wages fall, caused by actions of the government

  • because wages rise, without any government action

Explanation

Question 16 of 50

1

Classical economists believed the economy would reach a "stationary state" in the long run.

Select one of the following:

  • True
  • False

Explanation

Question 17 of 50

1

Classical economics is based on the concept that markets always give the correct price and that they move to that price quickly.

Select one of the following:

  • True
  • False

Explanation

Question 18 of 50

1

Fill the blank space to complete the text.

Suppose my income this month is $8,000 and I spent $7,000, and last month my income was $6,000 and I spent $6,000. What is my MPC? My MPC is .

Explanation

Question 19 of 50

1

Fill the blank space to complete the text.

If my MPC is what you calculated previously, a &50 billion increase in government spending would cuase how big a change in GDP? $ B.

Explanation

Question 20 of 50

1

A recessionary gap would be eliminated, according to Keynesian economists:

Select one of the following:

  • only though government action

  • because wages fall, without any government action

  • because wages fall, caused by actions of the government

  • because wages rise, without any government action

Explanation

Question 21 of 50

1

To Keynes, the most common cause of recessions is not enough:

Select one of the following:

  • consumption

  • investment

  • savings

  • prices

Explanation

Question 22 of 50

1

Fill the blank space to complete the text.

According to Keynes, in the long run we are all .

Explanation

Question 23 of 50

1

Fill the blank space to complete the text.

According to Keynes, the most important determinant of investment is .

Explanation

Question 24 of 50

1

Fill the blank space to complete the text.

Keynes' other expression for the previous answer is .

Explanation

Question 25 of 50

1

In Keynes' view, savings and investment do not have to be equal, where in the Classical view they always were.

Select one of the following:

  • True
  • False

Explanation

Question 26 of 50

1

Keynes believed the Great Depression came about because:

Select one of the following:

  • wages did not fall far enough

  • wages did not fall fast enough

  • wages fell, but prices didn't

  • none of the above

Explanation

Question 27 of 50

1

Keynes' theory is based primarily around:

Select one of the following:

  • aggregate demand

  • aggregate supply

  • using both aggregate demand and aggregate supply together

  • 2:30 in the afternoon

Explanation

Question 28 of 50

1

Fill the blank space to complete the text.

According to Keynes, the most important determinant of savings is .

Explanation

Question 29 of 50

1

Fill the blank space to complete the text.

According to the Classical Theory, savings and investments are determined by .

Explanation

Question 30 of 50

1

Fill the blank space to complete the text.

is the person who is thought of as the creator of supply side economics.

Explanation

Question 31 of 50

1

Fill the blank space to complete the text.

According to supply side theory, the Reagan and Bush tax cuts which targeted the rich will to the poor and middle class, helping everyone eventually.

Explanation

Question 32 of 50

1

One legacy of supply side economics is that we now care anout what variable in macroeconomics that we did not before?

Select one of the following:

  • investment

  • nominal wages

  • worker productivity

  • taxes

Explanation

Question 33 of 50

1

Fill the blank space to complete the text.

According to your professor, John Lennon was killed by .

Explanation

Question 34 of 50

1

Fill the blank spaces to complete the text.

The equation of exchange is = .

Explanation

Question 35 of 50

1

Fill the blank space to complete the text.

is the person we associate with this equation in modern times.

Explanation

Question 36 of 50

1

The equation of exchange as interpreted by the person in the previous question says that increases in the money supply cause inflation and decrease in the money supply cause recessions.

Select one of the following:

  • True
  • False

Explanation

Question 37 of 50

1

Fill the blank space to complete the text.

The Neo-Classical is the bringing together of Classical and Keynesian theory into modern economic theories.

Explanation

Question 38 of 50

1

New Keynesian economists blame recessions on:

Select one of the following:

  • "sticky" wages and prices

  • lack of spending

  • supply shocks

  • effective demand failures

Explanation

Question 39 of 50

1

New Classical economists blame recessions on:

Select one of the following:

  • "sticky" wages and prices

  • lack of spending

  • supply shocks

  • effective demand failures

Explanation

Question 40 of 50

1

Ben Bernanke, former chair of the Federal Reserve, blames the 2007 recession om too much savings coming into the United States, mostly from China.

Select one of the following:

  • True
  • False

Explanation

Question 41 of 50

1

Both New Keynesians and New Classicals believe the economy works according to Classical theory in the long run.

Select one of the following:

  • True
  • False

Explanation

Question 42 of 50

1

Aggregate Demand is:

Select one of the following:

  • total expenditure in the economy

  • total production in the economy

  • total consumer activity in the economy

  • both a and b

Explanation

Question 43 of 50

1

Keynesian economists believed that interest rates are determined by:

Select one of the following:

  • savings and investment

  • supply and demand for money

  • supply and demand for investment

  • money and savings

Explanation

Question 44 of 50

1

According to the Keynesians, the economy may be in disequiliribium.

Select one of the following:

  • True
  • False

Explanation

Question 45 of 50

1

Fill the blank space to complete the text.

The key to supply side economics is .

Explanation

Question 46 of 50

1

According to a Keynesian, _____ is the most volatile factor of the following:

Select one of the following:

  • consumption

  • taxes

  • savings

  • investment

Explanation

Question 47 of 50

1

Supply Side economics was correct in predicting that deregulation targeted at individual industries would improve the performance of the whole economy.

Select one of the following:

  • True
  • False

Explanation

Question 48 of 50

1

Most modern economists are:

Select one of the following:

  • New Monetarists

  • New Keynesians

  • New Classicals

  • New Orleans

Explanation

Question 49 of 50

1

The Laffer Curve says that there is a trade-off between inflation and unemployment.

Select one of the following:

  • True
  • False

Explanation

Question 50 of 50

1

New Classicals argue that new technologies destroy old jobs before they create many new jobs.

Select one of the following:

  • True
  • False

Explanation

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