Which of the following is NOT true?

Nominal Wages change in the short run

The 4 components (shifters) of Aggregate Demand are?

Consumer, Investments, Government, Net Exports.

When Aggregate Demand shifts, there is:

Movement along the Short Run Phillip’s Curve.

Consumer spending is made up of _______ and _______.

Autonomous Spending and Disposable Income

What would happen if the gov. increased spending without increasing taxes?

Increase annual deficit and national debt

Which of the following is NOT true of a recession?

Wages will increase (AS shifts to left) to get us back to full employment

We are in a recession by $1000 mill. away from FE and the MPC is .8, how much should spending & taxes changes

Spending increases $200, Taxes decreases $250

What are the two fiscal policy tools to necessarily close a recessionary gap?

Decrease Consumer Taxes and Increase Government Spending

What Fiscal Policy Action could the government do to fix a recessionary gap?

Increase Government Spending/Decrease Consumer Taxes, Decrease Transfer Payments/Increase Spending

In a stagflating economy, you would see...

High Unemployment & Higher Prices

Which is not a problem with Fiscal Policy.

It necessarily leads to more unemployment

studbud

Unit 3 A.P. Macro

27 termsStudBud Administration345 plays

An A.P. Macro Economic review of Unit 3: Aggregate Demand and Supply and Fiscal Unemployment: Made by Jamie Cline, Trevor Nguyen, and Feodor Rogachev

Flashcards27 cardsFPractice quizPHost liveL

Questions 27

Answers

1
Which of the following is NOT true?
Purchasing power increases when AD decreases
In the long run, AS adjusts to full employment
Investment spending triggers the LRAS to shift
Nominal Wages change in the short run
2
Fiscal Policy affects AD or AS?
AD
AS
3
The 4 components (shifters) of Aggregate Demand are?
Consumer, Income, Geriatric, National Budget.
Consumer, Interest, Government, National Debt.
Buyers, Related Goods, Income, Trends, Expectations.
Consumer, Investments, Government, Net Exports.
4
If an increase in government spending limits consumer spending, this is best known as...
Interest rate effect
Crowding out
Discretionary Fiscal Policy
The Marginal propensity to save
5
When Aggregate Demand shifts, there is:
No movement.
Movement along the Short Run Phillip’s Curve.
Movement along the Long Run Phillip’s Curve.
Short Run Phillip’s Curve shifting.
6
Consumer spending is made up of _______ and _______.
Autonomous Spending and Savings
Impulse spending and Savings
Autonomous Spending and Disposable Income
Disposable Income and Savings
7
What would happen if the gov. increased spending without increasing taxes?
Decrease annual surplus and Increase national debt
Increase annual deficit and national debt
Decrease annual deficit and Increase national debt
Increase annual surplus and decrease national debt
8
What is a tip Mr. Brady wants you to remember to help you EXCEPT?
In the Long Run we will get back to full employment
In the long run, wages match (change at the same rate) as price level
Income = shift AD whereas Wages = shift AS
Production = AD
9
Which of the following is NOT true of a recession?
In the long run, AS will shift to the right to get us back to full employme
Unemployment is high
The SRPC will shift to the left to get us back to full employment
Wages will increase (AS shifts to left) to get us back to full employment
10
We are in a recession by $1000 mill. away from FE and the MPC is .8, how much should spending & taxes changes
Spending increases $200, taxes increase $250
Spending increases $250 and taxes decrease $200
Spending increases $200, Taxes decreases $250
Spending increases $100 and taxes decrease $200
11
In the long run, what shifts to get us back to full employment (LRAS)
AS
AD
12
What are the two fiscal policy tools to necessarily close a recessionary gap?
Increase the Money Supply
Decrease Consumer Taxes and Decrease government spending
Increase G'vt Spending & Increase Consumer Taxes
Decrease Consumer Taxes and Increase Government Spending
13
What Fiscal Policy Action could the government do to fix a recessionary gap?
Increase Government Spending/Decrease Consumer Taxes
Decrease Government Spending/Decrease Consumer Taxes
Increase Government Spending/Increase Consumer Taxes
Decrease Transfer Payments/Increase Spending
14
How much government spending is needed to close this recessionary gap if the MPC is .8
5 Billion
100 Billion
25 Billion
20 Billion
15
In a stagflating economy, you would see...
Low Unemployment and Lower Prices
High Unemployment & Lower Prices
High Unemployment & Higher Prices
Low Unemployment and Higher Prices
16
According to the Phillip’s Curve, inflation rates and unemployment rates are _____ related.
Inversely
Directly
Not
17
Shifts in AD causes (a) _____________ on the Phillips curve in the __________ direction.
Shift; Opposite
Movement; Opposite
Shift; Same
Movement; Same
18
Which of the following situations will not shift Aggregate Supply?
Labor unions are negotiating for a new minimum wage.
Business expenditures increase
The Government increases taxes on businesses
Robotics have made a new advancement.
19
What does Mr. Brady explicitly want you to think about for "transfer payments"?
Discretionary Spending
Government Regulation
Increasing business taxes
Unemployment insurance
20
If the government increases spending by the same amount it increases taxes, what happens
There is no change in GDP
AD shifts to the left
AD shifts to the right
The LRAS shifts
21
In a positive outcome gap, unemployment will be...
Equal to the NRU
High (greater than 6%)
Low (less than 4%)
There's no way of knowing
22
Which is not a problem with Fiscal Policy.
Politically motivated politicians
It necessarily leads to more unemployment
Deficit Spending
Crowding Out
23
An increase in the price of a key input will cause the AD curve & SRAS to change how?
AD No Change/AS Decrease
AD Decrease/AS No Change
AD no change/AS Increase
AD Increase/AS Decrease
24
If productivity increases...
The SRPC shifts to the Left
AS shifts to the Left
The LRAS shifts to the right
AD shifts to the right
25
Which is not a "code" that AS is shifting?
"G'vt takes action"
"No policy action taken"
"According to classical economists"
"In the long run"
26
If Price Level increases...
It's because AD shifts to the left
Unemployment has increased
It's because AS shifts to the right
Real Wages decrease
27
If the unemployment is lower than normal, then where will the economy be in the long run?
Inflation
Recession
Full employment

Unit 3 A.P. Macro Flashcards | StudBud