macroeconomic gradded quiz unit 3 PDF

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macroeconomic gradded quiz unit 3 bus 1104...

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Wednesday, 1 December 2021, 5:02 PM Finished Wednesday, 1 December 2021, 5:42 PM 40 mins 3 secs 16.00/20.00 80.00 out of 100.00

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An important distinction between the classical and Keynesian view of the economy is that Select one: a. Keynes stressed the supply side of an economy while classical economists stressed the demand side of the economy. b. classical economists argued that output gaps were caused by shifts in the long-run aggregate supply while Keynes’ maintained that output gaps were created by shifts in aggregate demand. c. Keynes stressed the demand side of an economy while classical economists stressed the supply side of the economy. d. classical economists argued that output gaps were caused by shifts in the long-run aggregate supply while Keynes’ maintained that output gaps were created by wage and price rigidities. Feedback

The correct answer is: Keynes stressed the demand side of an economy while classical economists stressed the supply side of the economy. Question

2

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The inability of the government to stabilize the economy in the 1970s when real GDP has fallen, but inflation has remained high, led Robert Lucas to challenge the Keynesian macroeconomic policy prescriptions. Which of the following is the main tenet of his argument? Select one: a. Active stabilization policies tend to be destabilizing because of the long policy lags and consequently, slow down the economy’s self correction. b. There is no role for active stabilization policies because they do not take into account rational choices by individuals; failure to do so generally cancels the impact of fiscal and monetary policies. c. Individuals respond in predictable ways to their changing economic environment; active stabilization interferes with people’s ability to respond to changing economic conditions. d. The economy is inherently stable and any role for stabilization policy should be limited to those that affect long-run aggregate supply to promote economic growth and not aggregate demand. Feedback

The correct answer is: There is no role for active stabilization policies because they do not take into account rational choices by individuals; failure to do so generally cancels the impact of fiscal and monetary policies. Question 3 Correct Mark 1.00 out of 1.00

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An upward shift in the consumption function can be caused by Select one: a. expectations of product shortages. b. expectations of less income in the future. c. a decrease in consumer confidence. d. a reduction in the wealth of households. Feedback

The correct answer is: expectations of product shortages. Question 4 Correct Mark 1.00 out of 1.00

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An increase in the price level, all other things unchanged, will Select one: a. not affect the consumption function. b. shift the consumption function upward. c. shift the consumption function downward.

d. cause a movement to the right along the consumption function. Feedback

The correct answer is: shift the consumption function downward. Question 5 Correct Mark 1.00 out of 1.00

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Over time, _____ has/have been the general trend for most economies. Select one: a. constant real GDP b. rising real GDP c. falling real GDP and a rising price level d. constant nominal GDP and a falling price level Feedback

The correct answer is: rising real GDP Question 6 Correct Mark 1.00 out of 1.00

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Economists are: Select one:

a. concerned with developing theories and interested in solving problems. b. interested in solving problems but not concerned with developing theories. c. reluctant to predict changes in variables such as prices, employment, and spending. d. always in agreement on the best way to implement policy decisions. Feedback

The correct answer is: concerned with developing theories and interested in solving problems. Question 7 Correct Mark 1.00 out of 1.00

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Assuming a constant level of nominal income, the real income of an individual rises: Select one: a. during an inflationary phase in the economy. b. when deflation occurs in the economy. c. if hyperinflation takes place. d.

with a rise in natural rate of unemployment. Feedback

The correct answer is: when deflation occurs in the economy. Question 8 Correct Mark 1.00 out of 1.00

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In the 1960s, despite the successful application of expansionary fiscal policy in the United States, Milton Friedman argued that Select one: a. Keynesian supply-side policies were more effective at stimulating aggregate demand than expansionary fiscal policies. b. aggregate demand is affected by money and not by fiscal policy, and therefore only monetary policy should not be used to move the economy back to its potential output. c. aggregate demand is affected by money and not by fiscal policy, which is why policymakers should institute a policy of steady money growth and allow the economy to reach full employment through a process of self-correction. d. fiscal policy must be combined with monetary policy to move the economy back to its potential output, without increasing inflationary pressure. Feedback

The correct answer is: aggregate demand is affected by money and not by fiscal policy, which is why policymakers should institute a policy of steady money growth and allow the economy to reach full employment through a process of self-correction. Question 9 Correct Mark 1.00 out of 1.00

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Which of the following is true? Select one: a. If demand decreases, equilibrium price increases. b. If demand increases, equilibrium price decreases. c. If demand decreases, the demand curve shifts to the left. d. If demand decreases, the demand curve shifts to the right. Feedback

The correct answer is: If demand decreases, the demand curve shifts to the left. Question 10 Correct Mark 1.00 out of 1.00

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Which of the following is false? Select one: a. If demand increases and supply decreases, equilibrium price will go up. b. If demand remains constant and supply increases, equilibrium price will go down.

c. If demand decreases and supply increases, equilibrium price will rise. d. If supply is unchanged and demand decreases, equilibrium price will fall. Feedback

The correct answer is: If demand decreases and supply increases, equilibrium price will rise. Question 11 Correct Mark 1.00 out of 1.00

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Prior to the Great Depression, the dominant economic view held that Select one: a. fiscal policy could effectively eliminate a recessionary gap and return the economy to its potential output. b. economies should be able to reach full employment through a process of self-correction. c. monetary policy should be used to move the economy back to its potential output because it was more immediate than fiscal policy. d. any movement away from potential output was due to either an excess aggregate demand or an excess aggregate supply. Feedback

The correct answer is: economies should be able to reach full employment through a process of self-correction.

Question 12 Correct Mark 1.00 out of 1.00

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According to the international trade effect, holding everything else unchanged, Select one: a. an increase in net exports shifts the aggregate demand curve to the right. b. an increase in the domestic price level reduces net exports leading to a movement along the aggregate demand curve. c. an increase in the exchange rate shifts the aggregate demand curve to the right. d. an increase in the price level of foreign goods reduces imports leading to a movement along the domestic economy’s aggregate demand curve. Feedback

The correct answer is: an increase in the domestic price level reduces net exports leading to a movement along the aggregate demand curve. Question 13 Correct Mark 1.00 out of 1.00

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What is the difference between a change in aggregate demand and a change in aggregate quantity of real GDP demanded? Select one: a. A change in aggregate demand is represented by a movement along the aggregate demandcurve in response to a price change while a change in aggregate quantity of real GDP demanded is represented by a shift of the aggregate supply curve in response to a change in a component of aggregate demand. b. A change in aggregate demand is represented by a shift of the aggregate demand curve in response to a change in the actual price level while a change in aggregate quantity of real GDP demanded is represented by a movement along the aggregate demand curve in response to a change in the expected price level. c. A change in aggregate demand is represented by a shift of the aggregate demand curve in response to a change in a component of aggregate demand while a change in aggregate quantity of real GDP demanded is represented by a movement along the aggregate demand curve in response to a change in the price level. d. There is no difference between the two terms. Feedback

The correct answer is: A change in aggregate demand is represented by a shift of the aggregate demand curve in response to a change in a component of aggregate demand while a change in aggregate quantity of real GDP demanded is represented by a movement along the aggregate demand curve in response to a change in the price level. Question 14 Incorrect Mark 0.00 out of 1.00

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To identify the onset of a recession, the National Bureau of Economic Research (NBER) Business Cycle Dating Committee: Select one: a. uses data on nominal GDP for two consecutive quarters. b. uses a range of indicators including real GDP, employment and income. c. identifies declining economic activity solely based on a fall in real GDP. d. uses a procedure that determines the dates of peaks and troughs mainly on the basis of employment. Feedback

The correct answer is: uses a range of indicators including real GDP, employment and income. Question 15 Correct Mark 1.00 out of 1.00

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The saving function shows Select one: a. the amount of saving at each level of aggregate demand, holding all other determinants of saving constant. b. the amount of saving on at each level of disposable income, holding all other determinants of saving constant.

c. the amount of saving at each price level, holding all other determinants of saving constant. d. the amount of saving at each wage rate, holding all other determinants of saving constant. Feedback

The correct answer is: the amount of saving on at each level of disposable income, holding all other determinants of saving constant. Question 16 Incorrect Mark 0.00 out of 1.00

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According to the text, which of the following is true? Select one: a. Scientists can prove a hypothesis is true. b. Scientists can show that a hypothesis is false. c. Economists really don't try to use the scientific method. d. None of the above is true. Feedback

The correct answer is: Scientists can show that a hypothesis is false. Question 17 Correct Mark 1.00 out of 1.00

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Opportunity cost is best defined as: Select one: a. All of the possible alternatives given up. b. The value of the next best alternative that is given up in making a choice. c. The amount of money spent in consuming something. d. The amount of time and money spent in consuming something. Feedback

The correct answer is: The value of the next best alternative that is given up in making a choice. Question 18 Correct Mark 1.00 out of 1.00

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Suppose an economy’s exports increase and its imports decrease. All other things unchanged, this results in Select one: a. a decrease in net exports which will shift the aggregate demand curve to the right. b.

an increase in net exports which will shift the aggregate demand curve to the right. c. a decrease in net exports which will shift the aggregate supply curve to the left. d. an increase in net exports which will shift the aggregate supply curve to the right. Feedback

The correct answer is: an increase in net exports which will shift the aggregate demand curve to the right. Question 19 Incorrect Mark 0.00 out of 1.00

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An example of a normative statement is: Select one: a. The rate of unemployment is 4 percent. b. A high rate of economic growth creates more jobs for the country. c. The federal government spends half of its budget on national defense. d. Everyone in the country needs to be covered by national health insurance. Feedback

The correct answer is: Everyone in the country needs to be covered by national health insurance. Question

20

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According to the permanent income hypothesis, Select one: a. consumption in any period depends on the stable annual income that people expect to earn in their jobs. b. the amount of income that people require depends on the amount of consumption they need and want to undertake. c. consumption in any period depends on the average annual income people expect to receive for the rest of their lives. d. the amount of personal saving depends on the amount of consumption people plan to undertake when they retire. Feedback

The correct answer is: consumption in any period depends on the average annual income people expect to receive for the rest of their lives....