ECN 211: Final Exam Review 92 Questions
with Complete Solutions Real GDP is commonly used for what? - Correct Answer Short run changes.When real GDP falls, so does what? - Correct Answer - Personal income
- Corporate profits
- Consumer spending
- Investment spending
- Industrial production
- Housing
- Inventory
When the overall economy declines that is due to what? - Correct Answer - Reduction in spending in factories
When real GDP declines, what happens to the unemployment rate? - Correct Answer It increases.What is the natural rate of unemployment? - Correct Answer 5% or 6%.In the short run, what can money supply do? - Correct Answer It can temporarily push real GDP away from the long run.Model of aggregate demand/supply - Correct Answer Explains the short-run fluctuations around its long- run trend.Aggregate demand - Correct Answer The curve that shows the quantity of goods and services households, firms, government, and customers from abroad want to buy at each price level.Aggregate supply - Correct Answer The curve that shows the quantity of goods and services firms choose to produce or sell at each price level. 1 / 2
When there's a lower interest rate, what affect does that have on the quantity demanded? - Correct Answer It increases.When the price level decreases, what affect does that have on the interest rate, spending, and quantity?
- Correct Answer - Interest rate decreases
- Spending increases
- Quantity increases
As the real exchange dollar value decreases... - Correct Answer Quantity demanded increases.When consumption (C), investment (I), government purchases (G), and net exports (NX) increases, how does the aggregate demand curve shift? - Correct Answer It shifts to the right.When the government cut taxes, how does the aggregate demand curve shift? - Correct Answer It shifts to the right.When there is an increase in money supply how does the aggregate demand curve shift? - Correct Answer It shits to the right.In the long run, the supply curve is ___ and in the short run, the supply cure is ___ - Correct Answer -
Long run: Vertical
- Short run: Slopes upward
Labor, capital, natural resources, and technology is the same regardless of what? - Correct Answer The price level.Natural level output - Correct Answer Production of goods and services that the economy achieves in the long run when unemployment is at its natural rate.What shifts the short-run aggregate supply curve to the right? - Correct Answer - Increase in immigration
- Decrease in minimum wage
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