econ201 homework 3 quiz latest 2015

Chapter 11 Random

Question 1 1 / 1 point

The ____________ describes a situation where sufficient credit is available, but the economy experiences a reduction in consumption and investment.

Question options:

a)

wealth effect

b)

interest rate effect

c)

inflation rate effect

d)

price effect

Question 2 0 / 1 point

Potential GDP in the U.S. will be unaffected by ____________________.

Question options:

a)

technology

b)

the unemployment rate

c)

government institutions

d)

the amount of capital available

Question 3 1 / 1 point

Changes in the price level of the different components of aggregate demand are reflected in the AD/ASAD/AS macroeconomic model by a ________________________.

Question options:

a)

downward sloping AD curve

b)

longer distance to equilibrium point

c)

flatter top portion of AD curve

d)

shorter distance to equilibrium point

Question 4 1 / 1 point

Economic production has fallen to less than full potential due to inadequate incentives for firms to produce. The duration of this economic condition will likely be:

Question options:

a)

indefinite

b)

long-term

c)

short-term

d)

unknown

Question 5 1 / 1 point

When prices of outputs in an economy become sufficiently high causing production to exceed potential GDP, the resulting:

Question options:

a)

lower prices will lead to a lower quantity of demand.

b)

hyper-intense production will be unsustainable in the long run.

c)

higher wages will encourage workers to produce more at high prices.

d)

downward slope in aggregate supply curve will be short run.

Question 6 0 / 1 point

When the aggregate demand curves slope downwards because the price of a good increases, people will

Question options:

a)

substitute and buy other goods instead.

b)

buy at the higher price.

c)

consume less and save more.

d)

expect a wage increase.

Question 7 1 / 1 point

Due to inflationary pressures, the national income of households has been spread across a higher overall price base for goods and services. How will this affect be shown in an AD/ASAD/AS model?

Question options:

a)

a downward sloping AD curve

b)

a downward sloping AS curve

c)

nearly vertical AS slope at the far right

d)

nearly horizontal AD curve at the far left

Question 8 1 / 1 point

In an AD/ASAD/AS model:

Question options:

a)

the Consumer Price Index always slopes upwards.

b)

the GDP deflator is shown on the vertical axis.

c)

real GDP is shown on the horizontal axis.

d)

the potential GDP always slopes downwards.

Question 9 1 / 1 point

The term ”full employment GDP” is synonymous with which of the following?

Question options:

a)

aggregate GDP

b)

macroeconomic equilibrium

c)

Keynesian zone

d)

potential GDP

Question 10 1 / 1 point

The _________________ means that a higher price level leads to lower real wealth.

Question options:

a)

foreign price effect

b)

employment effect

c)

wealth effect

d)

interest rate effect

Chapter 11 Mandatory

Question 11 0 / 1 point

Refer to the graph above. A government creating economic policy in these circumstances should be most concerned about:

Question options:

unemployment but not inflation.

inflation but not unemployment.

inflation and unemployment.

neither inflation nor unemployment.

Question 12 1 / 1 point

The graph above reflects a significant increase in world oil prices. What will the impact on aggregate supply most likely lead to?

Question options:

a)

an increase in economic growth

b)

less inflationary pressures

c)

an increase in input prices

d)

a decrease in the natural unemployment rate

Question 13 0 / 1 point

The following table shows the aggregate supply and demand data for a country.

Price Level

Aggregate Demand

Aggregate Supply

100

10,000

4,000

200

9,000

5,000

300

8,000

5,000

400

7,000

7,000

500

6,000

8,500

600

5,000

9,000

700

4,000

9,500

What is the equilibrium output?

Question options:

a)

9,000

b)

4,000

c)

8,000

d)

7,000

Chapter 12 Random

Question 14 1 / 1 point

The sum of all the income received for contributing resources to GDP is called ___________________.

Question options:

a)

marginal income (X)

b)

national revenue (Y)

c)

national income (Y)

d)

marginal revenue (X)

Question 15 1 / 1 point

If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy:

Question options:

a)

is producing at a point where output is more than potential GDP.

b)

is producing at its potential GDP.

c)

is producing at its equilibrium point.

d)

is producing at a point where output is less than potential GDP.

Question 16 0 / 1 point

If a Keynesian expenditure-output model shows that aggregate demand for both goods and labor has shifted to the left to D1, while wages remained at w0 and prices remained at P0, what will be the result?

Question options:

a)

excess supply

b)

coordinated wage reductions

c)

natural rate of unemployment

d)

depression

Question 17 1 / 1 point

In macroeconomics, what name is given to the costs of changing prices that businesses must consider?

Question options:

a)

internal costs

b)

customer costs

c)

menu costs

d)

opportunity costs

Question 18 0 / 1 point

Which of the following is a distinguishing characteristic of a Keynesian cross diagram?

Question options:

a)

several different Phillips curves

b)

a flat line

c)

real GDP on the horizontal axis

d)

45-degree line

Question 19 1 / 1 point

If markets throughout the global economy all have flexible and continually adjusting prices, then:

Question options:

a)

each economy must shift in aggregate demand and create additional employment.

b)

all changes in prices and wages will create additional employment.

c)

all market-oriented economies will implement coordinated wage reductions.

d)

each economy will always head for its natural rate of unemployment.

Question 20 0 / 1 point

In macroeconomics, a _________________ is used to show the relationship between output and the input price level.

Question options:

a)

Keynesian framework

b)

microeconomic model

c)

A. Phillips curve

d)

expenditure-output model

Question 21 1 / 1 point

When an economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in:

Question options:

a)

mechanical devices.

b)

specialized services.

c)

computer or other technologies.

d)

tangible and/or intangible capital.

Question 22 1 / 1 point

In a Keynesian cross diagram, what name is given to the distance between an output level that is below potential GDP and the level of potential GDP?

Question options:

a)

national income (Y)

b)

recessionary gap

c)

expenditure-output

d)

inflationary gap

Question 23 1 / 1 point

The onset of a trade deficit is most likely supported by a country's:

Question options:

a)

increased consumption function.

b)

strong economic growth.

c)

existing trade surplus.

d)

reduction in the balance of trade.

Chapter 12 Mandatory

Question 24 1 / 1 point

The equilibrium quantity of labor and the equilibrium wage level decrease when:

Question options:

a)

labor demand shifts to the left, if wages are flexible.

b)

labor supply shifts to the right, if wages are flexible.

c)

labor supply shifts to the left, if wages are flexible.

d)

labor demand shifts to the right, if wages are flexible.

Question 25 1 / 1 point

Suppose that out of the original 100 increase in government spending, 33 will be recycled back into purchases of domestically produced goods and services in the second round and 10.89 is spent in the third round. Following this multiplier effect, what value would be recycled in the fourth round of this cycle?

Question options:

a)

9.89

b)

5.23

c)

3.59

d)

3.37

Question 26 0 / 1 point

Refer to the graph shown below. At point B:

Question options:

a)

businesses may raise prices.

b)

economic growth it low or even negative.

c)

output is expanding.

d)

unemployment is very low.

Question 27 1 / 1 point

The chart below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income, the MPC out of after-tax income is 0.9, investment is 58, government spending is 60, exports are 40, and imports are 0.1 of after-tax income.

National Income

After-tax income

Consumption

I+G+X

Minus Imports

Aggregate Expenditures

100

104

200

300

400

500

600

What does consumption equal when income equals 600?

Question options:

a)

540

b)

104

c)

374

d)

324

Question 28 1 / 1 point

When the economy is in a recession, the government will want to increase output. If the multiplier equals 2.5 and the government increases spending by 200, how much will output increase by?

Question options:

a)

500

b)

900

c)

100

d)

300