Technological change is ______ for economic growth than additional capital.
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more important
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Which of the following is a major difference between the AD-AS model and the dynamic AD-AS model?
The dynamic AD-AS model assumes
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potential GDP increases continually, while the AD-AS model assumes the LRAS does not change.
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When potential real GDP is equal to 70, this economy is in
----
The amount of the shortfall...
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recession
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the vertical distance between AE and the 45 angle line.
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When the price level rises from 104 to 124...
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All of the above
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Complete the following table for a static AD-AS model
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Gov't spending or decrease taxes / rise
-------
Decrease gov'r spending / fall
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The figure to the right illustrates the dynamic AD-AS model. Suppose the economy... to move AD2 to AD2 policy and reach equilibrium (point C) in the second period?
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Increase government spending
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One-time tax rebates, such as those in 2001 and 2008, increase consumption spending by less than a permanent tax cut bc...
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current income
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Globalization has made it ______ for developing countries to get...
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easier
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The figure in the window on the right shows how growth rates of real GDP per capita for the entire world have...
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The smallest acceleration in growth occurred during the twentieth century as the avg...
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A change in the price level causes a _____ the short run aggregate supply. In this figure, this is shown by moving from point ____. A change in any other factor causes a _____ the SRAS curve...by moving from point ____.
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movement along, A to B, shift in, B to C
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Consider the per-worker production function to the right.
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diminishing
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The figure to the right illustrates the economy...occurs at point B and potential GDP occurs at LRAS 06? That is...
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ALL OF THE ABOVE
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If the government raises the amount of taxes, holding everything else constant, then
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disposable income will decrease
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When examining economic growth rates throughout history
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the world experienced little to no growth until the industrial revolution
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Suppose the initially, the economy is in long-run macroeconomics equilibrium at point A. If there is increased pessimism about...
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AD0 to AD1, point B, SRAS0 to SRAS1, point C
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According to the figure at the right, productivity increased...after 1972, leading many...
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All of the above.
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Strong rule-of-law countries grow more rapidly than weak rule...
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Political reform.
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______ are spending by the government on goods...
______ represent total government spending...
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Government Purchases
Government expenditures
increased;decreased
there has been a major increase in
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Policy that is specifically designed to affect aggregate supply...
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supply-side economics
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Each year that the federal government runs a deficit, the federal debt _____. Each year...______.
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grows; shrinks
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Indicate which of the following would cause a shift in the aggregate demand...
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monetary policy, change in the U.S. exchange, increased consumer optimism, lower taxes
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Indicate which of the following is correct about the multiplier effect
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All of the above
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Consider the downward-sloping aggregate demand curve to the right. Which of the following results...
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Interest rate effect, wealth effect
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Healthier, more educated workers tend to be more productive. Greater...
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the brain drain
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The term "crowding out" refers to a situation where...
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Crowding out is a decline in private expenditures as a result of increases in government purchases.
- Government spending increases interest rates and decreases private investment .
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Refer to the graph to the right. According to the economic concept of catch-up...
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Poorer countries should grow more quickly and will be at point A.
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Which of the following is not included in the calculation of total government purchases?
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Unemployment insurance benefits paid for by the fed.
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Refer to the table to the right. Why has the productivity
growth in the United States been faster in most industrial countries?
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Flexible labor markets, and efficient financial markets.
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Some spending and taxes increase or decrease with business cycle.
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Monetary policy.
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If there is an increase in the marginal propensity to consume (MPC), then
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the value of the expenditure multiplier will increase
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In the aggregate expenditure model, when is planned investment greater than the actual investment?
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When there is an unplanned decrease in inventories.
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The aggregate demand curve shows the relationship between
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the overall price level and the aggregate quantity of output demanded.
- an increase in the price level reduces real money holdings, which reduces the amount of expenditures.
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Suppose that initially, the economy is in long-run macroeconomic equilibrium at point A...
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AD0 to A.
Point B
SRAS0 to SRAS1
Point C
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According to the figure to the right, productivity increased after 1995
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All of the above
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If the economy adjusts through the automatic mechanism, then a decline in aggregate demand comes
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a recession in the short run, and a decline in the price level in the long run.
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If the economy is initially, full-employment equilibrium, then an increase in aggregate demand causes...
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an increase; ?
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Which of the following is usually the cause of stagflation?
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A supply shock as a result of an unexpected increase
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Increased government debt can lead to higher interest rates and, as a result, crowding out of private investments.
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All of the above
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When planned aggregate expenditure is less than real GDP, as in the diagram
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inventories accumulate if production is not scaled back
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Which of the following statements regarding the 2009 stimulus package is true?
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The largest category of expenditures was health care---individual cuts.
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What is the effect on inventories, GDP, and unemployment when...
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Inventories decrease, GDP and unemployment increases.
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We say that the economy as a whole is in macroeconomic equilibrium if
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all of the above... aggregate expenditure equals GDP
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One concern with economic growth is that it may occur through a process Joseph Schumpter referred
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is that the increased technology and ideas create new goods and services that replace old ones.
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A curve showing the relationship between the price level and the level of aggregate expenditure
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the Aggregate Demand curve
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The position of the long-run aggregate supply curve is determined by
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the # of workers, the amount of capital, and the technology
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How does the dynamic model of aggregate supply and aggregate demand explain inflation?
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By showing that if total spending in the economy grows faster than the total production, prices will rise.
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Countries that began to experience strong economic growth at an earlier period have the advantage of
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utilizing the benefits of compound growth to a greater extent than countries that began to grow l8.
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Technological change is more important to long run economic growth
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foreign direct investment
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In the long run, government tax policy can affect private investment which...which of the following is not true
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A tax rebate given one year will...
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The higher the tax rate,
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the
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An increase in the labor force or capital stock is illustrated as...
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shift from a to b
a shift from b to a
shift from a to b
a shift from b to a
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Suppose an economy experiences technological progress and this causes a shift in the LRAS curve
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There will be an increase in government purchases
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Country X...
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the real value of household wealth
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In the figure at right, a $20 trillion increase in planned investment...
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the multiplier effect
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The figure to the right illustrates the relationship between weak and...
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all of the above
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In the diagram to the right, moving from Point A to point b is called a _______ the AD curve
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movement along; shift in
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Indicate which of the following is an explanation for the productivity slowdown of 1973-1994
answer
...
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