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Macro 11 Flashcards | StudBud
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Macro 11
Macro 11
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Questions
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Answers
1
In the _______________ zone, the AS curve is _______________
Keynesian; steep
Neoclassical; Near vertical
Intermediate zone; flat
None of the above
2
The Aggregate Demand/Aggregate Supply model explains which type of unemployment?
Structural unemployment
Natural unemployment
Cyclical unemployment
Frictional unemployment
3
Which of the following is not a component of Aggregate Demand?
Net Exports
Consumption spending
Investment spending
All of the above are components of Aggregate Demand
4
Keynes’ Law states
Demand creates its own supply
In the LR, we can change supply more freely than we can in the SR
Supply creates its own demand
Supply and demand are interdependent
5
Assume that input prices fall. The price level will __________ and output will __________
Rise; fall
Rise; rise
Fall; fall
Fall; rise
6
True or False: The AD/AS model can explain why inflation persists over time
True
False
7
Potential GDP is also known as
None of these
Short Run Aggregate Supply
Full employment GDP
Full Aggregate Supply
8
Assume the government increases taxes. The price level will __________ and output will __________
Fall; fall
Rise; rise
Rise; fall
Fall; rise
9
Productivity growth shifts LRAS and SRAS to the right
False
True
