Fiscal policy refers to the manipulation of ___ by the government

government spending and taxation.

According to the wealth effect, when the price level decreases, the purchasing power of assets:

increases and consumer spending increases.

The short run in macroeconomic analysis is a period in which

many production costs can be assumed to be fixed.

The aggregate supply curve shows the relationship between:

aggregate price level & the quantity of real GDP supplied.

The Aggregate Demand shift could be caused by

a decrease in consumption of goods and services

Classical economics states that

markets should be allowed to regulate themselves.

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Economics Unit 5: AD & AS #2

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AD-AS, Fiscal Policy, & Multiplier

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Questions 15

Answers

1
What is the best combination of fiscal policies to fix this economy?
increase GS, Increase taxes
lower GS, lower taxes
raise GS, decrease taxes
lower GS, increase taxes
2
What is going on in this economy?
stagflation
inflation
a recession
rising unemployment
3
Increasing aggregate demand will generate _ in real GDP and _ in the price level in the SR.
a decrease, a decrease
a decrease; no change
an increase; no change
an increase; an increase
4
Fiscal policy refers to the manipulation of ___ by the government
the money supply
imports and exports
of interest rates.
government spending and taxation.
5
The Long Run Shift is from
A to B
A to B
B to C
C to A
6
The short run aggregate supply shift could be caused by
decreased consumption
decreased subsidies
increased resource prices
increased productivity
7
According to the wealth effect, when the price level decreases, the purchasing power of assets:
decreases and consumer spending increases.
remains constant and consumer spending is unchanged.
increases and consumer spending decreases.
increases and consumer spending increases.
8
The short run in macroeconomic analysis is a period in which
wages become fully flexible.
the unemployment rate is assumed constant.
many production costs can be assumed to be fixed.
interest rates are fixed
9
Which of the following might be part of a contractionary policy?
a tax increase
a tax cut
increase money supply
increase in government spending
10
According to John Maynard Keynes, who should spend in a recession if no one else will?
other countries
businesses
consumers
government
11
The long-run aggregate supply curve is:
upward sloping.
downward sloping.
horizontal.
vertical.
12
The aggregate supply curve shows the relationship between:
aggregate price level & the quantity of real GDP supplied.
the price of oil and the quantity of real GDP supplied.
the price of money and the quantity of output supplied.
the aggregate price level and the unemployment rate.
13
the amount of output demanded by C, I, G, and Net Exports at different price levels is called
aggregate demand.
simple demand
market demand
aggregate supply
14
The Aggregate Demand shift could be caused by
a decrease in consumption of goods and services
a decrease in resource prices
an increase in American exports to China
an increase in Investment spending by resources
15
Classical economics states that
government should cut taxes in a recession.
government should raise taxes in a recession.
markets should be allowed to regulate themselves.
government should spend in a recession.

Economics Unit 5: AD & AS #2 Flashcards | StudBud