Macroeconomics Questions

Suppose you go shopping for a gift for a friend and also find a sweater that you want for yourself. You pay cash for the gift and write a check for the sweater. Your purchases are made with money holdings represented byA.the asset demand for money because you used money for both purchases.B.your supply of money to the economy.C.the transaction demand for money because you planned to buy the gift and the precautionary demand for money because you did not anticipate buying the sweater.D.the transaction demand for money because you paid for the gift with cash.

Suppose that the Fed judges inflation to be the most significant problem in the economy and that it wishes to employ all three of its policy​ instruments, then the Fed will engage inA.open market​ sales, increasing the reserve​ requirement, and increasing the discount rate.B.open market​ sales, decreasing the reserve​ requirement, and increasing the discount rate.C.open market​ purchase, increasing the reserve​ requirement, and decreasing the discount rate.D.open market​ purchase, increasing the reserve​ requirement, and increasing the discount rate.

According to the Keynesian theory a decrease in the money supply increases the interest rate and decreases investment spending. The result of this is thatA.real GDP decreases by the same amount as the change in investment.B.real GDP decreases by a larger amount than the change in investment.C.real GDP decreases by a smaller amount than the change in investment.D.real GDP increases by a smaller amount than the change in investment.

Holding money as a medium of exchange to make payments is known asA.asset demand.B.aggregate demand.C.precautionary demand.D.transactions demand.

According to modern Keynesian​ analysis, the​ short-run aggregate supply curve isA.vertical.B.downward sloping.C.horizontal.D.upward sloping.

Modern Keynesian analysis assumes that the​ short-run aggregate supply curve isA.upward sloping.B.horizontal.C.vertical.D.downward sloping.

​Say's law asserts thatA.permanent shortages are normal occurrences in a market economy.B.permanent surpluses are normal occurrences in a market economy.C.demand creates its own supply.D.supply creates its own demand.

The​ short-run Keynesian aggregate supply curve isA.horizontal.B.downward sloping.C.upward sloping.D.vertical.

The extent to which real GDP responds to changes in the price level along the​ short-run aggregate supply curve is largely determined byA.the speed with which input prices adjust and people become more fully informed.B.the ability of firms to hire additional​ inputs, particularly workers.C.the ability of firms to use existing workers and capital more intensively.D.All of the above.E.B and C only.

Changes in factors of production that influence economic growth willA.shift LRAS but not SRAS.B.shift SRAS but not LRAS.C.shift SRAS and LRAS.D.not shift SRAS or LRAS.

The Modern Keynesian​ short-run aggregate supply curve is best described by which of the following​ statements?A.It is very steep at low levels of real​ GDP; decreases slightly as real GDP​ grows; and becomes horizontal at full employment.B.It is very steep at low levels of real​ GDP; decreases slightly as real GDP​ grows; and becomes very flat as real GDP surpasses full employment.C.It is very flat at low levels of real​ GDP; increases slightly as real GDP​ grows; and becomes very steep as real GDP surpasses full employment.D.It is very flat at low levels of real​ GDP; increases slightly as real GDP​ grows; and becomes horizontal at full employment.

Refer to the economy shown in the graph to the right. Suppose that there is an increase in wages.The​ short-run effect of this change on the economy isA.a leftward shift of the SRAS​ curve, and​ cost-push inflation.B.a leftward shift of the AD​ curve, and​ demand-pull inflation.C.a rightward shift of the SRAS​ curve, and​ cost-push inflation.D.a rightward shift of the AD​ curve, and​ demand-pull inflation.E.​none; changes in prices have no effect on the economy in the short run.

Suppose that the wage rate of labor decreased temporarily. The result of this would be best described byA.a decreasein both the​ short-run aggregate supply and​ long-run aggregate supply curves.B.an increasein both the​ short-run aggregate supply and long run aggregate supply curves.C.a decreasein the​ short-run aggregate supply curve only.D.an increasein the​ short-run aggregate supply curve only.

In an open​ economy, if the federal government has a budget​ deficit, the trade balance is more likely to beA.a deficit.B.a surplus.C.either a deficit or​ surplus; it depends on macroeconomic conditions.D.balanced.

Which of the following statements is true when considering budget deficits and the national​ debt?A.Both the national debt and federal budget deficit are stock variables.B.Both the national debt and federal budget deficit are flow variables.C.The national debt is a flow variable and a federal budget deficit is a stock variable.D.The national debt is a stock variable and a federal budget deficit is a flow variable.

According to the classical​ model, if an excess quantity of labor is supplied at a particular wage​ level, full employment will be maintained becauseA.the government will establish special work programs.B.wages will fall rapidly to permit businesses to continue hiring everyone who wants to work.C.the government will step in and stimulate spending.D.the equilibrium wage rate will rise to stimulate spending.

If a government spends more than it receives during a​ year, then during this year it experiences a​ ________, and if it spends less than it​ receives, it experiences a​ ________.A.budget​ deficit; balanced budgetB.budget​ surplus; balanced budgetC.budget​ deficit; budget surplusD.budget​ surplus; budget deficit

In the short ​run, increased government budget deficitsA.can influence real GDP, the price level, and employment.B.increase taxes.C.have no effect on equilibrium real GDP.D.

Which of the following will occur when aggregate supply remains stable but aggregate demand increases in the short​ run?A.The unemployment rate rises.B.The price level falls.C.A recessionary gap is created.D.An inflationary gap is created.

The federal government has its best opportunity to lower its national debt when it hasA.a balanced budget.B.a budget deficit.C.a budget surplus.D.All of the above.