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Macroeconomics Review: Unit 3 Flashcards | StudBud
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Macroeconomics Review: Unit 3
Macroeconomics Review: Unit 3
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AP Macroeconomics Unit 3 Review
Flashcards
25 cards
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Questions
25
Answers
1
Why is Aggregate Demand downward sloping?
Interest-Rate Effect
Wealth Effect
All of the Above
Foreign Trade Effect
2
Which of the following is a range of Aggregate Supply?
Full range
Capital Range
Inflationary Range
Classical Range
3
At which point is the equilibrium output and price level?
Price: C Output: 3
Price: B Output: 2
Price: A Output: 1
Price: B Output: 1
4
Which has the biggest effect on shifting AD?
Tax Increase
No Change
Spending Decrease
Tax Increase and Spending Increase
5
What is a problem with the Crowding-Out Effect?
Government spending will increase the demand for money
All of the above
Deficit spending will lead to an increase of debt
A higher demand for money will drive up the interest rate
6
Who is the best economics teacher ever?
Mr. Schomburg
Mr. Clifford
Mrs. Holloman
Mr. Kornell
7
What is an example of Non-Discretionary Policy?
Government Spending Increase
Welfare
Income Taxes
Decreasing Disposable Income
8
What does Contractionary Fiscal Policy not accomplish?
Raise Taxes
Reduce Inflation
Reduce Government Spending
Increase GDP
9
AD increases and makes inflationary gap, what will cause AS to go naturally to full employment?
Wage-Price Spiral
Fiscal Policy
Government Intervention
Multiplier Effect
10
If the MPC is .9 and taxes increase, what is the tax multiplier?
10
29
1
9
11
What shifts Long-Run Aggregate Supply?
Government Spending
Technological Advances
Investment Spending
Resource Price Increase
12
Which of the following is not a shifter of Aggregate Supply?
(Non-spending) Actions of the Government
Net Exports
Productivity
Resource Prices
13
What would cause an increase in the productivity of a factories workers?
Less Investment Spending
More Physical Capital
More Factories
More Human Capital
14
In which scenario would the following shift in this graph occur?
Increase in Net Exports
Decrease in Government Spending
Decrease in Resource Price
Technological Advancements
15
Expenditures on medical care, education, and training are investments in which of these?
Physical Capital
Human Capital
Technology
Labor Productivity
16
What is represented by the point D?
Inflationary Gap
Full Employment
Normal Economic Profit
Recessionary Gap
17
What situation is depicted by this graph?
Recessionary Gap
Inflationary Gap
Full Employment
Actual GDP is above Potential GDP
18
What could cause this shift?
Prices of Imported Resources
Technological Advances
Increase in Wages
Government Regulations
19
How are the beliefs between flexible and sticky wages different?
Sticky wages are believed to help keep wages from rising
Keynesians: prices/wages = flexible, Classicals: they aren’t
Classicals believe that prices and wages are flexible
Intermediates:flexible wages =better for economy than sticky
20
How would an increase in production shift the PPC curve?
Upward
No Change
Inward
Outward
21
If MPC is .5 and consumption increases by $2 million, how much will GDP change?
$4 million GDP increase
$10 million GDP increase
$4 million GDP decrease
$2 million GDP decrease
22
What is the main problem when using Discretionary Fiscal Policy?
Time Lags due to bureaucracy
Non-Discretionary is more popular
Politically Motivated Policies
Taxes Increasing
23
If government spending increases without increase in taxes, which of the following would occur?
Recognition Lag
Budget Deficit
The Crowding-Out Effect
The Net Export Effect
24
What would would an increase in investment cause?
Decrease in Tax Burden on Consumers
Auto-Stabilization
Decrease in GDP
Technological Advancement
25
What does Expansionary Fiscal Policy accomplish?
Reduce inflation and increase GDP
Decrease government spending
Reduce unemployment and increase GDP
Decrease disposable income
