The Macro Economy Today, 17e Bradley R Schiller

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TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

1) According to the classical view, the economy will not self-adjust to deviations from its long-term growth trend.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-133 (Static) According to the...

2) Keynes believed that a market-driven economy is inherently unstable.

⊚ true

⊚ false

3) An economic expansion refers to an increase in the volume of goods and services produced.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-135 (Static) An economic expansion...

4) During a recession, real output falls.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-136 (Static) During a recession,...

5) Changes in the availability of money have little impact on the macro performance of the economy.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-137 (Static) Changes in the availability...

6) Keynes argued that policy levers are both effective and necessary.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-138 (Static) Keynes argued that...

7) Business cycles result from recurrent shifts of the aggregate supply and aggregate demand curves.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-139 (Static) Business cycles result...

8) The quantity of real output supplied rises as the price level rises, ceteris paribus.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-140 (Static) The quantity of real...

9) The profit effect occurs because, in the short run, resource costs typically do not increase as rapidly as the price of goods and services.

⊚ true

⊚ false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-141 The profit effect occurs because,...

10) Equilibrium is unique; it is the only price-output combination that is mutually compatible with aggregate supply and aggregate demand.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-142 (Static) Equilibrium is unique; it is...

11) If the level of prices and output are compatible with both buyers' and sellers' intentions, then the policy goals are satisfied.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-143 (Static) If the level of prices...

12) Both Keynesian and monetarist theories emphasize the potential of aggregate demand shifts to alter macro outcomes.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-144 (Static) Both Keynesian and...

13) Supply-side theories of the business cycle focus on how improper incentives lead to the unwillingness of producers to supply more goods and services at existing prices.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-145 (Static) Supply-side theories of...

14) The short-run aggregate supply curve is upward sloping, while the long-run aggregate supply curve tends to be vertical.

⊚ true

⊚ false

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-146 (Static) The short-run aggregate...

15) In the long run, shifts in the aggregate demand curve affect the price level but not the level of output.

⊚ true

⊚ false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-147 (Static) In the long run, shifts...

16) Self-regulation is quick in Keynesian models of the economy.

⊚ true

⊚ false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB TF Qu. 08-156 (Static) Self-regulation is...

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

17) Which of the following was not characteristic of the U.S. economy during the Great Depression?

A) Families lost their farms.

B) Automobile production fell.

C) The stock market crashed.

D) Unemployment reached 50 percent.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-01 (Static) Which of the following...

18) The study of aggregate economic activity for the economy as a whole is

A) opportunity cost.

B) scarcity.

C) macroeconomics.

D) microeconomics.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-02 (Static) The study of aggregate...

19) Alternating periods of economic growth and contraction in real GDP define

A) capitalism.

B) business cycles.

C) macro equilibrium.

D) Say's Law.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-03 (Static) Alternating periods of...

20) According to classical theory,

A) Keynes neglected to take account of the drag on prosperity that can result from decreased aggregate demand.

B) macro equilibrium might generate inefficient outcomes and get worse in the absence of government intervention.

C) flexible wages and prices allow a laissez-faire economy to adjust wages and prices to shifts in aggregate demand.

D) business cycles are not relevant and do not occur.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-04 (Static) According to classical...

21) According to the Keynesian view, if economic instability rises

A) the government should buy more output to provide stability.

B) the economy will return to its long-term growth trend.

C) investment would increase in the economy.

D) no aggregate price change.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Algorithmic
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-05 (Algo)

22) According to the classical view, if consumer demand slows down,

A) aggregate prices will decrease and the economy will return to its long-term growth trend.

B) aggregate prices will increase and the economy will return to its long-term growth trend.

C) wages will increase and the economy will return to its long-term growth trend.

D) investment and government demand will increase so that the economy will return to its long-term growth trend.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-05 (Static) According to the...

23) Based on the classical view,

A) unemployment duration is never short.

B) cyclical unemployment might occur temporarily.

C) all goods produced are always purchased at an unchanging price.

D) persistent unemployment might be a problem.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-06 (Static) Based on the...

24) If wages and prices are flexible, then a recession is best eliminated when prices

A) and wages both rise.

B) and wages both fall.

C) rise and wages drop.

D) drop and wages rise.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-07 (Static) If wages and prices are...

25) According to classical economists, market-driven economies

A) are typically self-adjusting.

B) are inherently unstable.

C) require government intervention.

D) are always in long-run equilibrium.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-08 (Static) According to classical...

26) Say's Law states that

A) supply creates its own demand.

B) shifts of either supply or demand can achieve a given market equilibrium.

C) wages and prices are inflexible, which prevents the achievement of market equilibrium.

D) increased prices lead to increased supply.

27) In the early 1900s, which of the following was not true?

A) Falling price levels appeared to limit an increase in unemployment.

B) Periods of high unemployment tended to be brief.

C) Say's Law seemed to work.

D) Government intervention was commonly used to stimulate the economy.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-10 (Static) In the early 1900s,...

28) Unlike the classical economists, Keynes asserted that

A) the economy is inherently unstable.

B) laissez-faire policies will lead to macro equilibrium.

C) prices and wages are flexible.

D) markets naturally self-adjust.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-11 (Static) Unlike the classical...

29) Who believed that small disturbances in output, prices, or unemployment were likely to be magnified by the invisible hand of the marketplace?

A) President Herbert Hoover

B) Adam Smith

C) John Maynard Keynes

D) Jean-Baptiste Say

30) According to Keynes, to stimulate the economy the government should do all of the following except

A) buy more output.

B) employ more people.

C) make more money available.

D) raise taxes.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Apply
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-13 (Static) According to Keynes,...

31) According to Keynes, when the economy falters, the government should do any of the following except

A) practice a laissez-faire policy approach.

B) provide more money for unemployment benefits.

C) make more money available by increasing the money supply.

D) buy more output.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-14 (Static) According to Keynes...

32) According to the classical view, which of the following should the government do when the economy overheats?

A) decrease spending

B) employ fewer people

C) nothing, flexible prices will allow the economy to adjust to its long-term growth trend

D) lower taxes

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Algorithmic
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-15 (Algo)

33) According to Keynes, which of the following should the government do when the economy overheats?

A) employ more people

B) increase spending

C) raise taxes

D) practice laissez-faire policies

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-15 (Static) According to Keynes...

34) According to Keynes, which of the following can be done to slow down an overheated economy?

A) decrease government purchases

B) decrease taxes

C) make more money available

D) employ more people in the public sector

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Stable or Unstable?
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-16 (Static) According to Keynes...

35) Which of the following is true about business cycles in the United States?

A) They are remarkably similar in length but vary greatly in intensity.

B) They vary greatly in length, frequency, and intensity.

C) They are similar in frequency and intensity but not in length.

D) They are similar in length, frequency, and intensity.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-17 (Static) Which of the following is...

36) Which of the following is characteristic of a downturn in a business cycle?

A) lower unemployment rates

B) lower real output

C) increased aggregate demand

D) full employment

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-18 (Static) Which of the following is...

37) The inflation-adjusted value of all goods and services produced is

A) the GDP deflator.

B) nominal GDP.

C) GDP per capita.

D) real GDP.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-19 (Static) The inflation-adjusted...

38) Real GDP is better than nominal GDP for measuring growth because real GDP has been adjusted for changes in

A) the price level.

B) unemployment.

C) the business cycle.

D) productivity.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-20 (Static) Real GDP is...

39) Changes in real GDP are best used to measure

A) inflation.

B) changes in the price level.

C) business cycles.

D) population growth.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-21 (Static) Changes in real...

40) The Great Depression did not

A) follow a period of apparent prosperity.

B) lead to an unemployment rate that reached 25 percent.

C) cause President Roosevelt to declare a "bank holiday" in 1933.

D) lead to a high rate of inflation.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-22 (Static) The Great Depression...

41) The most prolonged departure from the long-term growth path for the United States occurred during

A) the 1980s.

B) the Great Depression.

C) World War II.

D) the years following World War II.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-23 (Static) The most prolonged...

42) A decline in total real output for two or more consecutive quarters is called

A) laissez-faire.

B) a recession.

C) a growth recession.

D) Say's Law.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-24 (Static) A decline in total real...

43) In the production possibilities model, a recession can be represented by a point

A) inside the production possibilities curve.

B) outside the production possibilities curve.

C) on the production possibilities curve.

D) at either end of the production possibilities curve.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-25 (Static) In the production...

44) During which of the following situations is the percentage change in real GDP always positive?

A) depression

B) inflation

C) recession

D) growth recession

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-26 (Static) During which of the...

45) A growth recession is said to occur when the economy grows at a

A) rate less than that of the population.

B) rate less than the long-term average.

C) slower rate in the current year than the preceding year.

D) negative rate.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-27 (Static) A growth recession is...

46) Which of the following caused a recession in the years immediately following World War II?

A) a surge in investment spending

B) pent-up demand for consumer goods

C) cutbacks in defense production

D) technological advances

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-01 The nature and history of business cycles.
Topic : Historical Cycles
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-28 (Static) Which of the following..

47) Which of the following is not considered a macro outcome?

A) the level of unemployment

B) external shocks to the economy, such as severe weather

C) the average price of goods and services

D) the year-to-year expansion in overall productive capacity

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-29 (Static) Which of the following is...

48) Which of the following is generally considered a desirable outcome of government intervention when contracting the economy?

A) fewer jobs

B) a lower price level

C) more jobs

D) more political power

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Algorithmic
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-30 (Algo)

49) Which of the following is generally considered a desirable outcome of government intervention when expanding the economy?

A) more jobs

B) a higher price level

C) higher unemployment rates

D) greater deficits

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-30 (Static) Which of the following is...

50) All of the following can be used to measure macroeconomic performance except for the

A) total real value of goods and services produced.

B) average price level of goods and services.

C) international value of the dollar.

D) growth rate of the population.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-31 (Static) All of the following can...

51) External shocks include all of the following except

A) population growth.

B) natural disasters.

C) terrorist attacks.

D) wars.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-32 (Static) External shocks include...

52) Internal market forces include

A) wars, natural disasters, and trade disruptions.

B) tax policy, government spending, and availability of money.

C) population growth, spending behavior, and invention.

D) external shocks and policy levers.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-33 (Static) Internal market forces...

53) In the absence of external shocks or government policy, an economy will

A) still experience business-cycle fluctuations because of internal market forces.

B) not experience business-cycle fluctuations.

C) not be able to expand production and output.

D) be less stable.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-03 The major macro outcomes and their determinants.
Topic : A Model of the Macro Economy
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-34 (Static) In the absence of external...

54) Determinants of macroeconomic performance work on macroeconomic outcomes through

A) aggregate supply and aggregate demand.

B) international balances.

C) external shocks.

D) internal market forces.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Apply
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-35 (Static) Determinants of macroeconomic...

55) Which of the following is illustrated by the aggregate demand curve?

A) how real personal income varies with the inflation rate

B) how total quantity of output demanded varies with the average price level

C) how real output varies with the inflation rate

D) how real personal income varies with the price level

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-36 (Static) Which of the following is...

56) Other things being equal, the aggregate demand curve is downward sloping because

A) people buy fewer goods and services at lower average incomes.

B) people buy more goods and services at lower average prices.

C) a higher average price level induces producers to offer more output than otherwise.

D) people buy more goods and services at higher average prices.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-37 (Static) Other things being...

57) The real balances effect says that an increase in the price level

A) increases the price of U.S.-produced goods, causing Americans to buy more imported goods.

B) increases the price of U.S.-produced goods, causing foreign consumers to buy fewer U.S. goods.

C) increases the need to borrow, which drives up interest rates and reduces loan-financed purchases.

D) reduces the real value of a fixed amount of savings, consequently reducing the quantity of goods and services purchased.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Apply
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-38 (Static) The real balances effect ...

58) Assume you have $2,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 120 at the end of the year, the real value of your savings is now closest to

A) $1,667.

B) $1,880.

C) $2,120.

D) $2,400.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-39 (Static) Assume you have...

59) Assume you have $1,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 115 at the end of the year, the real value of your savings is now closest to

A) $870.

B) $885.

C) $1,115.

D) $1,150.

60) Assume you have $5,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 125 at the end of the year, the real value of your savings is now closest to

A) $4,000.

B) $4,875.

C) $5,125.

D) $6,250.

61) Assume you have $2,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 95 at the end of the year, the real value of your savings is now closest to

A) $1,900.

B) $1,905.

C) $2,095.

D) $2,105.

62) Assume you have $1,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 92 at the end of the year, the real value of your savings is now closest to

A) $908.

B) $920.

C) $1,087.

D) $1,092.

63) Ceteris paribus, if average prices in the U.S. economy fall relative to foreign prices, then the

A) real balances effect will lead to a lower quantity of U.S. output demanded.

B) foreign trade effect will lead to a higher quantity of U.S. output demanded.

C) interest rate effect will lead to a lower quantity of U.S. output demanded.

D) profit effect will lead to a higher quantity of U.S. output demanded.

64) Ceteris paribus, if average prices in the U.S. economy fall, then the

A) real balances effect will lead to a lower quantity of U.S. output demanded.

B) foreign trade effect will lead to a lower quantity of U.S. output demanded.

C) interest rate effect will lead to a higher quantity of U.S. output demanded.

D) cost effect will lead to a higher quantity of U.S. output demanded.

65) Which of the following is an explanation for why the aggregate demand curve slopes downward?

A) the interest rate effect

B) the cost effect

C) the profit effect

D) the laissez-faire effect

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-46 (Static) Which of the following is...

66) Which of the following is not associated with the aggregate supply curve?

A) factors of production

B) the interest rate effect

C) the profit effect

D) the cost effect

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-47 (Static) Which of the following is...

67) According to the profit effect,

A) some costs do not rise when average prices rise.

B) the aggregate supply curve is vertical in the short run.

C) the aggregate supply curve has a negative slope.

D) all costs rise when average prices rise.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Apply
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-48 (Static) According to the profit...

68) As output rises, the profit effect results from

A) lower opportunity costs.

B) tight supplies of factors of production.

C) the law of demand.

D) constant costs that do not rise when prices rise.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-49 (Static) As output rises,...

69) A positively sloped aggregate supply curve reflects

A) the idea that greater production lowers profit margins, which raises quantity demanded.

B) the decrease in the real value of money as the price level rises.

C) the rising costs associated with increased capacity utilization.

D) the lower quantity demanded at a higher price level.

70) The cost effect implies that

A) higher costs are reflected in higher average prices.

B) the aggregate supply curve is linear.

C) lower average prices result in greater quantity supplied.

D) the aggregate demand curve is downward sloping.

71) Macro equilibrium always occurs when

A) aggregate supply is greater than aggregate demand.

B) the labor force is fully employed.

C) aggregate demand equals aggregate supply at a given average price level.

D) the level of output is expanding.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-52 (Static) Macro equilibrium always...

72) The unique situation in which the behavior of buyers and sellers is compatible is called

A) full-employment GDP.

B) macro equilibrium.

C) micro equilibrium.

D) labor-market balance.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-04 The nature of aggregate demand (AD) and aggregate supply (AS).
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-53 (Static) The unique situation...

73) Which of the following is a potential problem at macro equilibrium?

A) It is inconsistent with macroeconomic goals.

B) A surplus of goods exists.

C) A shortage of goods exists.

D) The economy is permanently stuck there.

74) If aggregate demand decreases and aggregate supply decreases, the level of real output will

A) decrease, and the price level will definitely decrease.

B) decrease, and the price level will definitely increase.

C) either increase or decrease, but the price level will stay the same.

D) decrease, but the price level is indeterminate.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-55 (Static) If aggregate demand...

75) Which of the following results if, at a particular price level, the aggregate quantity supplied exceeds the aggregate quantity demanded?

A) Aggregate demand shifts to the right.

B) Aggregate supply shifts to the left.

C) A surplus causes the price level to rise.

D) A surplus causes the price level to fall.

76) Which of the following will result if the price level is below the equilibrium level?

A) Aggregate demand will increase.

B) Aggregate supply will decrease.

C) Consumers will bid prices up by competing for goods currently in shortage.

D) Shortages will force sellers to lower prices in order to increase aggregate quantity demanded.

77) Alternating periods of economic growth and contraction are

A) the result of government intervention, according to Keynes.

B) the result of recurrent shifts of aggregate demand and aggregate supply.

C) indicative of an unstable economy and require government intervention, according to classical economists.

D) not typical of the U.S. economy.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-58 (Static) Alternating periods of...

78) Ceteris paribus, the price level will decrease if the aggregate

A) supply curve shifts to the left.

B) demand curve shifts to the left.

C) demand curve shifts to the right.

D) supply and aggregate demand curves both shift to the right.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-59 (Static) Ceteris paribus, the...

79) If the current macro equilibrium is below an output level of that associated with full employment, how will the current equilibrium be affected by a rightward shift of the aggregate supply curve, ceteris paribus?

A) a higher price level and a higher level of output

B) a higher price level and a lower level of output

C) a recession or depression

D) a lower price level and a higher level of output

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-60 (Static) If the current...

80) Which combination of shifts of aggregate demand and supply will definitely cause an increase in real GDP?

A) aggregate demand shifts to the left and aggregate supply shifts to the right

B) aggregate demand shifts to the left and aggregate supply shifts to the left

C) aggregate demand shifts to the right and aggregate supply shifts to the right

D) aggregate demand shifts to the right and aggregate supply shifts to the left

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Aggregate Demand and Supply
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-61 (Static) Which combination of...

81) Controversies between Keynesian, monetarist, and supply-side theories focus on the

A) shape and sensitivity of the aggregate demand and aggregate supply curves.

B) existence or nonexistence of the aggregate supply curve.

C) importance of international balances to the economy.

D) usefulness of aggregate demand and aggregate supply to analyze adjustment of the macro equilibrium.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-62 (Static) Controversies between Keynesian,...

82) Which of the following is true if equilibrium exceeds full employment?

A) The economy is inside the production possibilities curve.

B) The economy is experiencing low inflation.

C) Growth rates are unacceptably low.

D) The economy is working beyond normal capacity.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-63 (Static) Which of the following is...

83) Which of the following economic perspectives focuses on the need for government to use spending and taxes to shift aggregate demand and thus correct problems of unemployment and inflation?

A) supply-side

B) Keynesian

C) classical

D) monetarist

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-64 (Static) Which of the following...

84) Which of the following economic perspectives focuses on the need for government to shift aggregate supply to correct problems of unemployment and inflation?

A) supply-side

B) Keynesian

C) classical

D) monetarist

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-65 (Static) Which of the following...

85) According to Keynesian theory, the correct fiscal policy to stimulate the economy is to

A) raise taxes to increase aggregate demand.

B) increase the money supply to increase aggregate supply.

C) increase government expenditures to increase aggregate demand.

D) lower taxes to increase aggregate supply.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-66 (Static) According to Keynesian...

86) According to Keynes, unemployment results from

A) increased business investment that reduces consumer spending.

B) flexible wages and prices.

C) insufficient spending on the part of consumers, business, and government.

D) increased government spending that reduces consumer spending.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-67 (Static) According to Keynes,...

87) Keynesian levers include

A) deregulation.

B) fiscal policy.

C) external shocks.

D) changes in the money supply.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-68 (Static) Keynesian levers...

88) A tax cut can be characterized as

A) monetary policy only.

B) fiscal policy only.

C) supply-side policy only.

D) either fiscal policy or supply-side policy.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-69 (Static) A tax cut can be...

89) From the supply-side perspective, the economy may fail to reach full employment because of

A) production incentives.

B) declining costs.

C) lack of government regulation.

D) taxes that are too high.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-70 (Static) From the supply-side...

90) Individual employment and training programs are levers most likely to be advocated by

A) classical economists.

B) monetarists.

C) Keynesian economists.

D) supply-side economists.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-71 (Static) Individual employment and...

91) Which of the following is the best example of supply-side policy?

A) the government response to the Great Depression

B) a $300 stimulus check sent from the government to every adult in the country

C) the Reagan tax cuts in 1981

D) the increased money supply during the coronavirus pandemic

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Competing Theories of Short-Run Instability
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-72 (Static) Which of the following is...

92) The recent emphasis by some economists on long-term outcomes is reminiscent of

A) Keynesian theory.

B) classical theory.

C) supply-side theory.

D) monetarist theory.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-73 (Static) The recent emphasis by some...

93) Which group of economists believes that there is a natural rate of output that is relatively immune to short-run fluctuations in aggregate demand?

A) supply-siders

B) Keynesians

C) monetarists

D) fiscal economists

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 08-02 The difference between Classical and Keynesian views of macro stability.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-74 (Static) Which group of economists believes...

94) A vertical aggregate supply curve

A) implies that supply-side policies will have no effect on the macro equilibrium.

B) implies that aggregate demand shifts have no impact on output.

C) is likely in the short run.

D) reflects the inflexibility of prices and wages.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-75 (Static) A vertical aggregate...

95) For the aggregate supply curve, the profit effect

A) provides an incentive for producers to decrease output when prices rise.

B) dominates in the long run and causes the curve to be upward sloping.

C) along with the cost effect causes the curve to be downward sloping in the long run.

D) is temporary in the short run, while in the long run, it is canceled out because the cost effect dominates.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-76 (Static) For the aggregate supply curve,...

96) When the AS curve is vertical, increases in AD will

A) increase the average price level but have no impact on unemployment.

B) increase the average price level and decrease unemployment.

C) increase both the average price level and unemployment.

D) have no impact on either the average price level or unemployment.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-77 (Static) When the AS curve is...

97) In the long run, the AD-AS model suggests that an increase in aggregate demand will lead to

A) a higher price level and an increase in real GDP.

B) a higher price level only.

C) an increase in real GDP only.

D) a lower price level.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Evaluate
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-78 (Static) In the long run, the...

98) In the long run, which of the following is true?

A) Cost effects offset profit effects.

B) Profit effects are larger than cost effects.

C) Cost effects are larger than profit effects.

D) There is no cost effect or profit effect.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-79 (Static) In the long run, which...

99) When the AS curve is vertical, fiscal policy will be

A) ineffective against both inflation and unemployment.

B) effective against inflation but not unemployment.

C) effective against unemployment but not inflation.

D) effective against both inflation and unemployment.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom's : Analyze
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 08-05 How changes in AD and AS affect macro outcomes.
Topic : Long-Run Self-Adjustment
Type : Static
Source : Chapter 08 Test Bank - Algorithmic and Static > TB MC Qu. 08-80 (Static) When the AS curve is...

100) The only policy lever that is effective against unemployment when the AS curve is vertical is

A) fiscal policy.

B) monetary policy.

C) supply-side policy.

D) laissez-faire policy.

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