Exam 3 Econ

Consumption, investment, government spending, exports, and imports are:

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

Keynesian economics focuses on explaining why recessions and depressions occur, as well as offering a ______________________ for minimizing their effects.

Aggregate demand is more likely to _________________ than aggregate supply in the short run.

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

The equilibrium quantity of labor and the equilibrium wage increase when:

The equilibrium quantity of labor increases and the equilibrium wage decreases when:

The equilibrium quantity of labor decreases and the equilibrium wage increases when:

____________________ will not cause a shift of the AS curve in a Keynesian framework.

According to the Keynesian framework, ________________ in __________________ may cause inflation, but not a recession.

According to the Keynesian framework, ________________________ may cause a recession, but not inflation.

According to the Keynesian framework, which of the following may help a country reduce inflation, but will not help that country to get out of a recession?

According to the Keynesian framework, which of the following will not help a country to get out of a recession, but may help that country reduce inflation

According to the Keynesian framework, ____________________________ will not help reduce inflation, but may help a country get out of a recession.

The Keynesian economic framework is based on an assumption that:

According to the _____________________ argument, a market-oriented economy has no obvious way to implement a plan of systematic wage reductions.

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

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?

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

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

According to macroeconomic theory, evidence that high unemployment may be accompanied by low inflation, and low unemployment may be accompanied by high inflation is supported by the:

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

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

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

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?

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

Which of the following will cause the multiplier to be smaller and cause changes in investor confidence to have a smaller effect in an economy?

________________ economists place an emphasis on __________ run economic performance.

The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to rebound back to its _____________ and its ____________________.

Which of the following is a building block of neoclassical economics?

Which of the following government policies would be supported by neoclassical macroeconomic assumptions?

Which of the following represents a Keynesian point of view of macroeconomics?

From a neoclassical viewpoint, government should focus less on:

The neoclassical view holds that long-term expansion of potential GDP due to _______________________ will determine ____________________.

The Keynesian view of economics assumes that:

Which of the following is a distinguishing characteristic of the neoclassical view?

Over the long run, a surge in aggregate demand from a neoclassical perspective will most likely result in:

If a neoclassical model shows increasing wages in the economy over the long run, what else will likely occur?

If an economy experiences a decrease in aggregate demand due to a decline in consumer confidence and output falls below potential GDP, which of the following is likely to occur?

Suppose that a rise in business confidence has led to more investment in the economy and higher levels of output. In the short-run Keynesian analysis, the rise in aggregate demand will:

From a neoclassical view, which of the following is a true statement?

Which of the following is a valid criticism of the rational expectations theory?

In the neoclassical view, changes in ____________________ can only have a short-run impact on output and on unemployment.

In the long-run neoclassical view, when wages and prices are flexible, ________________________ determine the size of real GDP.

The theory of _____________________ holds that people will use all information available to them to form the most accurate possible expectations about the future.

At a macroeconomic level, the theory of rational expectations points out that if the ______________________ is vertical over time, then people should rationally expect this pattern.

When a shift in ________________ occurs, rational expectations hold that its impact on output and employment will only be temporary.

In the neoclassical view, the economy has a ___________________________ to move back to potential GDP.

After reports of the subprime mortgage crisis began to appear in the media, which of the following most likely caused housing prices to fall?

If the neoclassical argument that the economy always moves back to potential GDP is accepted, then which of the following will be more important?

From a neoclassical view, which of the following is less important?

The shape of the ______________ involves a tradeoff between unemployment and inflation.

From a neoclassical perspective, which of the following would most likely be viewed as an element that underpins long-run productivity growth in the economy?

The ___________________ argument tends to view inflation as a cost that offers no offsetting gains in terms of lower unemployment?

Which of the following is most strongly supported by the Keynesian perspective of macroeconomics?

Referring to a Keynesian Phillips curve, a reduction in inflation is likely to cause:

Why do neoclassical economists tend to put relatively more emphasis on long-term growth than on fighting recession?

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.

A ______________________ means that government spending and taxes are equal.

A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.

A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income.

When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is ____________________.

What do goods like gasoline, tobacco, and alcohol typically share in common?

The federal government levies _____________________________ on people who pass assets ____________________________, either after death or during life.

The government can use _____________ in the form of ____________________ to increase the level of aggregate demand in the economy.

If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used?

A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes.

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?

If individual income tax accounts for more total revenue than the payroll tax in the U.S., why would over half the households in the country pay more in payroll taxes than in income taxes?

28. When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting:

Which of the following is least likely to be the result of economic disruptive patterns caused by a prolonged period of government budget deficits?

A country's economic data indicates that there has been a substantial reduction in the financial capital available to private sector firms. Which of the following most likely had the greatest influence on this economy?

From a macroeconomic point of view, which of the following is a source of demand for financial capital?

The U.S. economy has two main sources for financial capital; _______________________ and ____________________________.

An additional investment in human capital, especially for the low-income nations of the world, will likely directly increase which of the following?

The slope of the production possibility frontier is determined by the ________________ of expanding production of one good, measured by how much of the other good would be lost.

When one nation can produce a product at lower cost relative to another nation, it is said to have a(n) __________________ in producing that product.

The idea behind comparative advantage reflects the possibility that one party:

Which of the following is true?

According to international trade theory, a country should:

_____________________ identifies the area where a producer's absolute advantage is relatively greatest, or where the producer's absolute disadvantage in productivity is relatively least.

Trade allows each country to take advantage of _________________ in the other country.

Some nations that seek to produce all of their own needs face the problem that:

Intra-industry trade between similar trading partners allows the gains from ______________________ that arise when firms and workers specialize in the production of a certain product.

When nations increase production in their area of _________________ and trade with each other, both sides can benefit.

A tariff differs from a quota in that a tariff is:

Tariffs are taxes imposed on _________________.

_____________ are numerical limitations on the quantity of products that can be imported.

Which of the following is the best example of a quota?

____________ means selling goods below their cost of production.

An import quota does which of the following?

__________________ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products.

Economists would say tariffs:

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because:

International trade is fundamentally a ________________________.

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly known as the _______________.