Econ Chapter 25 Flashcards

 
Search

Create
Log in Sign up

Log in Sign up

You are using an outdated browser

Your web browser version is no longer supported. Please update to use Quizlet.

Update your browser

42 terms

2x);height:24px;width:24px;”>
Erin_Miller7

Econ Chapter 25

STUDY

PLAY

Consumption, investment, government spending, exports, and imports are:

A. all complementary elements of a market-orientated economy.
B. some of the opposing elements found in a market-orientated economy.
C. all components of aggregate demand.
D. some of the building blocks of Keynesian analysis.

C
If markets throughout the global economy all have flexible and continually adjusting prices, then:

A. all market-oriented economies will implement coordinated wage reductions.
B. each economy will always head for its natural rate of unemployment.
C. each economy must shift in aggregate demand and create additional employment.
D. all changes in prices and wages will create additional employment.

B
Keynesian economics focuses on explaining why recessions and depressions occur, as well as offering a ______________________ for minimizing their effects.

A. pricing strategy
B. macro-economic model
C. set of menu costs
D. policy prescription

D
Aggregate demand is more likely to _________________ than aggregate supply in the short run.

A. shift substantially
B. remain unchanged
C. decrease substantially
D. increase slightly

A
The equilibrium quantity of labor and the equilibrium wage level decrease when:

A. labor supply shifts to the right, if wages are flexible.
B. labor demand shifts to the right, if wages are flexible.
C. labor demand shifts to the left, if wages are flexible.
D. labor supply shifts to the left, if wages are flexible.

C
The equilibrium quantity of labor and the equilibrium wage increase when:

A. labor supply shifts to the right, if wages are flexible.
B. labor demand shifts to the right, if wages are flexible.
C. labor demand shifts to the left, if wages are flexible.
D. labor supply shifts to the left, if wages are flexible.

B
The equilibrium quantity of labor increases and the equilibrium wage decreases when:

A. labor demand shifts to the left, if wages are flexible.
B. labor supply shifts to the left, if wages are flexible.
C. labor demand shifts to the right, if wages are flexible.
D. labor supply shifts to the right, if wages are flexible,

D
The equilibrium quantity of labor decreases and the equilibrium wage increases when:

A. labor supply shifts to the left, if wages are flexible.
B. labor demand shifts to the left, if wages are flexible.
C. labor demand shifts to the right, if wages are flexible.
D. labor supply shifts to the right, if wages are flexible,

A
____________________ will not cause a shift of the AS curve in a Keynesian framework.

A. Prices of inputs
B. Changes in input prices
C. Changes in output prices
D. Changes in inputs

C
According to the Keynesian framework, ________________ in __________________ may cause inflation, but not a recession.

A. decrease; interest rates
B. an increase; domestic investment
C. a decrease; a major trading partner’s economy
D. a decrease; a major trading partner’s export prices

B
According to the Keynesian framework, ________________________ may cause a recession, but not inflation.

A. a major trading partner’s economic slowdown
B. a decrease in interest rates
C. an increase in domestic investment
D. a decrease in a major trading partners export prices

A
According to the Keynesian framework, which of the following may help a country reduce inflation, but will not help that country to get out of a recession?

A. increased spending by the government on health care
B. an increase in taxes on business investments
C. an increase in military spending
D. a decrease in the tax rate on consumer income

D
According to the Keynesian framework, which of the following will not help a country to get out of a recession, but may help that country reduce inflation?

A. an increase in military spending
B. a decrease in military spending
C. increase in spending by the government on health care
D. decrease in spending by government on health care

B
According to the Keynesian framework, ____________________________ will not help reduce inflation, but may help a country get out of a recession.

A. increased spending by the government on health care
B. increased taxes on business investments
C. decreased military spending
D. increased consumer tax rate

A
The Keynesian economic framework is based on an assumption that:

A. an increase in government spending will cause the aggregate demand curve to shift to the left.
B. prices and wages are sticky and do not adjust rapidly.
C. an increase in government spending will cause the aggregate demand curve to shift to the left.
D. people can afford a high level of government services.

B
According to the _____________________ argument, a market-oriented economy has no obvious way to implement a plan of systematic wage reductions.

A. sticky wage and price
B. sticky wage
C. Keynesian
D. coordination

D
In macroeconomics, what name is given to the costs of changing prices that businesses must consider?

A. opportunity costs
B. internal costs
C. menu costs
D. customer costs

C
If a Keynesian expenditure-output model shows that aggregate demand for both goods and labor has shifted to the left to D1, while wages remained at w0 and prices remained at P0, what will be the result?

A. excess supply
B. natural rate of unemployment
C. coordinated wage reductions
D. depression

A
When an economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in:

A. mechanical devices.
B. specialized services.
C. computer or other technologies.
D. tangible and/or intangible capital.

D
The onset of a trade deficit is most likely supported by a country’s:

A. existing trade surplus.
B. strong economic growth.
C. reduction in the balance of trade.
D. increased consumption function.

B
According to macroeconomic theory, evidence that high unemployment may be accompanied by low inflation, and low unemployment may be accompanied by high inflation is supported by the:

A. neoclassical expenditure-output model.
B. Keynesian cross diagram.
C. Keynesian Phillips curve tradeoff.
D. Keynesian Inflation trade-off model.

C
When the consumption function ordinates MPT 0.2, MPS 0.3, MPI 0.5, and MPC 0.7 are plotted on a graph, what will their values reflect?

A. flatter consumption function due to low marginal propensity to tax
B. steeper consumption function due to low marginal propensity to save
C. flatter consumption function due to high marginal propensity to invest
D. steeper consumption function due to high marginal propensity to consume

D
In macroeconomics, a _________________ is used to show the relationship between output and the input price level.

A. Phillips curve
B. microeconomic model
C. expenditure-output model
D. Keynesian framework

A
If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy:

A. is producing at its potential GDP.
B. is producing at a point where output is more than potential GDP.
C. is producing at a point where output is less than potential GDP.
D. is producing at its equilibrium point.

C
If a Phillip curve shows that unemployment is low and inflation is high in the economy, then that economy:

A. is producing at its potential GDP.
B. is producing at a point where output is more than potential GDP.
C. is producing at a point where output is less than potential GDP.
D. is producing at its equilibrium point.

B
The sum of all the income received for contributing resources to GDP is called ___________________.

A. national income (Y)
B. national revenue (Y)
C. marginal income (X)
D. marginal revenue (X)

A
In a Keynesian cross diagram, what name is given to the distance between an output level that is below potential GDP and the level of potential GDP?

A. expenditure-output
B. inflationary gap
C. recessionary gap
D. national income (Y)

C
In a Keynesian cross diagram, what name is given to the distance between an output level that is below potential GDP and the level of potential GDP?

A. expenditure-output
B. inflationary gap
C. recessionary gap
D. national income (Y)

C
Suppose that out of the original 100 increase in government spending, 33 will be recycled back into purchases of domestically produced goods and services in the second round and 10.89 is spent in the third round. Following this multiplier effect, what value would be recycled in the fourth round of this cycle?

A. 3.59
B. 9.89
C. 3.37
D. 5.23

A
Suppose that out of the original 100 of government spending, 33 will be recycled back into purchases of domestically produced goods and services in the second round and 10.89 is spent in the third round. Following this multiplier effect, what will the value of the total aggregate expenditures be after the fourth round in the cycle is completed?

A. 141.70
B. 147.48
C. 147.62
D. 144.41

B
Suppose that out of the original 100 increase in government spending, 60 will be recycled back into purchases of domestically produced goods and services. Following this multiplier effect, what value will be recycled in the next round in the cycle?

A. 42
B. 3.6
C. 16.66
D. 36

D
When the economy is in a recession, the government will want to increase output. If the multiplier equals 2.5 and the government increases spending by 200, how much will output increase by?

A. 100
B. 300
C. 500
D. 900

C
The economy is in a recession and the government wants to increase output. If the multiplier equals 3 and the government increases spending by 250, how much will output increase by?

A. 50
B. 100
C. 200
D. 750

D
Which of the following is a distinguishing characteristic of a Keynesian cross diagram?

A. real GDP on the horizontal axis
B. a flat line
C. 45-degree line
D. several different Phillips curves

C
Which of the following data would be analyzed to determine whether any shift in the MPI has occurred over the course of the past 5 year period?

A. interest rates
B. exchange rates
C. foreign income
D. MPS

B
Which of the following will cause the multiplier to be smaller and cause changes in investor confidence to have a smaller effect in an economy?

A. bigger leakages
B. smaller leakages
C. increased trade
D. decreased trade

A
37. Refer to the graph shown below. At point B: A. economic growth it low or even negative.
B. output is expanding.
C. unemployment is very low.
D. businesses may raise prices.
A
38. Refer to the graph shown below. This graph illustrates a:
A. Keneyesian Curve.
B. Neoclassical Curve.
C. Phillips Curve.
D. Labor Demand Curve.
C
39. Refer to the graph shown below. At point A:
A. economic growth is declining.
B. the economy has full employment.
C. inflation tends to be declining.
D. wages can be lowered due to worker surplus.
B
40. Refer to the graph shown below. Point C in the graph represents:
A. the level Keynesian macroeconomic policy strives for.
B. a moderate growth level in the economy.
C. a moderate level of unemployment in the economy.
D. moderate inflation and all of the above.
D
41. The chart below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income, the MPC out of after-tax income is 0.9, investment is 58, government spending is 60, exports are 40, and imports are 0.1 of after-tax income. What does consumption equal when income equals 600?

a. 104
b. 324
c. 374
d. 540

C
42. The chart below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income, the MPC out of after-tax income is 0.9, investment is 58, government spending is 60, exports are 40, and imports are 0.1 of after-tax income. What is the equilibrium level of national income for this economy?

a. Y=200
b. Y=300
c. Y=400
d. Y=500

B
YOU MIGHT ALSO LIKE…
40 terms
ECON A201 Midterm Review Modules 4-7
80 terms
macro ch 24, 25, 26
80 terms
macro ch 24, 25, 26
47 terms
Chapter 16 Supply Side Policy: Short-Run Options
OTHER SETS BY THIS CREATOR
50 terms
Anatomy Final
35 terms
Anatomy Rat Dissection
20 terms
Key Court Cases
41 terms
Anatomy Chapter 15
THIS SET IS OFTEN IN FOLDERS WITH…
46 terms
Econ Chapter 24
45 terms
Econ Chapter 28
121 terms
ECON 131 Practice Exam 2
50 terms
Econ Chapter 29

Course Hero Logo
Course Hero Symbol

    • Find Study Resources

      • Main Menu
      • by School
      • by Subject

        Course Study Guides
      • by Book

        Literature Study Guides
        Infographics

      Get Instant Tutoring Help
      Earn by Contributing

      • Main Menu
      • Earn Free Access
      • Upload Documents
      • Refer Your Friends
      • Become a Tutor
      • Scholarships
    • For Educators

      Log in

      Sign up

    • app store button

      google play button



  • Find
    Study Resources

    • by School

    • by Subject

      • Course Study Guides

    • by Book

      • Literature Study Guides

      • Infographics



  • Get Instant
    Tutoring Help



  • Earn by
    Contributing

    • Earn Free Access

      Learn More >

    • Upload Documents

    • Refer Your Friends

    • Earn Money

    • Become a Tutor

    • Scholarships

      Learn More >

  • Are you an educator?

  • Log in

  • Sign up

University of Maryland, University College

ECON

ECON 201

Keynesian & Neoclassical Economics Module

Each economy will head more quickly toward its


  • University of Maryland, University College


  • ECON 201

  • Test Prep

  • Magistrate_Steel_Stingray15

  • 6




  • 91%
    (33)
    30 out of 33 people found this document helpful

Info icon

This preview shows 3 out of 6 pages.



Subscribe to Unlock

Right Arrow Icon

each economy will head more quickly toward its natural rate of unemployment.
all market-oriented economies should implement coordinated wage reductions.
each economy must increase its aggregate demand and create additional employment.
Quiz:
Choose the BEST answer.
Which of the following is a building block of neoclassical economics?
Cyclical unemployment.
Sticky wages and prices.
Wages and prices will adjust in a flexible manner.
The size of the economy is determined by aggregate demand.
Image of page 3

Info icon
Subscribe to view the full document.



Subscribe to Unlock

Right Arrow Icon

Choose the BEST answer.
The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to
rebound back to its ________ and its ________.
real GDP : natural rate of unemployment
potential GDP : cyclical unemployment rate
potential GDP : natural rate of unemployment
long term growth; cyclical unemployment
Choose the BEST answer.
The Keynesian economic framework is based on an assumption that:
an increase in government spending will cause the aggregate demand curve to shift to the left.
people can afford a high level of government services.
prices and wages are sticky and do not adjust rapidly.
Choose the BEST answer.
Fill in the blanks. According to the Keynesian perspective, the government ________ a role in managing
the macroeconomy ________.
does not have : when there is unemployment and inflation
has : especially when actions by consumers, firms, and trading partners are weak or fall short of
expectations
does not have : anytime
has : especially in the long run
Choose the BEST answer.
Moving along the aggregate demand curve, a decrease in real GDP demanded is associated with which
of the following?
An increase in wealth.
A decrease in the price level.
An increase in income.
An increase in the price level.
Choose the BEST answer.
In the Keynesian version of the AD/AS model, which of the following should you use to represent the AS
curve?
A horizontal line drawn at the existing aggregate price level.
The AS curve shifting as potential GDP expands.
An upward sloping curve with a vertical top.
The AS curve shifting as productivity increases.
Choose the BEST answer.
A horizontal AS curve means that changes in GDP will be caused by:
changes in potential output.
cyclical unemployment
Image of page 4
changes in aggregate demand.
Choose the BEST answer.
What is the best explanation for the slope of the Neoclassical zone of the aggregate supply curve?
An increase in aggregate demand causes both real output and the price level to increase.
A small increase in aggregate demand when the economy is operating below its potential output will not
have much effect on the price level.
Image of page 5

Info icon
Subscribe to view the full document.



Subscribe to Unlock

Right Arrow Icon

Image of page 6
You’ve reached the end of this preview.

  • Fall 13

  • Economics,

    Macroeconomics,

    Inflation,
    Keynesian economics,
    best answer

  • Twitter Icon
  • Email Icon
  • URL Icon
    Share this link with a friend:


    Copied!


Report



Subscribe to Unlock

Right Arrow Icon

Most Popular Documents for ECON 201

  • Prev
  • Next

  • 5 pages
    Econ 201 Fiscal Policy Module

    • changes in taxes changes in government expenditure Choose the BEST answer When
    • University of Maryland, University College
    • ECON 201

      Spring 2016

    Econ 201 Fiscal Policy Module

  • 5 pages
    Econ 201 Monetary Policy Module

    • The percentage of a banks deposits that it is required to maintain in the bank
    • University of Maryland, University College
    • ECON 201

      Spring 2016

    Econ 201 Monetary Policy Module

  • 7 pages
    Econ 201 Policy Application

    • increase cyclical unemployment while eventually causing inflation 27 Choose ALL
    • University of Maryland, University College
    • ECON 201

      Spring 2016

    Econ 201 Policy Application

  • 3 pages
    UMUC ECON 201 - Macroeconomics (Week 1 Assignment)

    • UMUC ECON 201 – Macroeconomics (Week 1 Assignment)
    • University of Maryland, University College
    • ECON 201

      Spring 2016

    UMUC ECON 201 – Macroeconomics (Week 1 Assignment)

  • 13 pages
    UMUC ECON 201 - Principles of Macroeconomics

    • Lumberjacks are structurally unemployment when they are replaced by machines
    • University of Maryland, University College
    • ECON 201

      Spring 2016

    UMUC ECON 201 – Principles of Macroeconomics

  • 4 pages
    UMUC IFSM 300 Quiz 8

    • Which of the following is the key benefit of effective organizational change
    • University of Maryland, University College
    • ECON 201

      Spring 2016

    UMUC IFSM 300 Quiz 8

View
more

  • Bookmarked
    Keynesian & Neoclassical Economics Module

    [ document.course.dept_acro ] [ document.course.course_num ]

    [ document.title ]

    [ document.bookmarkTime ]

Keynesian & Neoclassical Economics Module

ECON 201

Keynesian & Neoclassical Economics Module

Viewing now

Interested in Keynesian & Neoclassical Economics Module

?

Bookmark it to view later.

Bookmark Keynesian & Neoclassical Economics Module.

Bookmarked!

No bookmarked documents.



Bookmark this doc

Recently Viewed

Keynesian & Neoclassical Economics Module

[ document.course.dept_acro ] [ document.course.course_num ]

[ document.title ]

satisfaction guaranteed seal

Study on the go

  • Download the iOS

  • Download the Android app

Other Related Materials

14 pages
Module 5

  • PreviousNext Choose the BEST answer An accurate interpretation of the long run
  • University of Maryland, College Park
  • ECON 201

    Fall 2015

Module 5

9 pages
Keynesian and Neoclassical Economics — Self-Check & Quiz Questions.pdf

  • Keynes believed that the government should to get the economy out of recession
  • Broward College
  • ECO 13

    Fall 2010

Keynesian and Neoclassical Economics — Self-Check & Quiz Questions.pdf

11 pages
ECON 201 KEYNESIAN & NEOCLASSICAL ECONOMICS Quiz 1.docx

  • ECON 201 KEYNESIAN & NEOCLASSICAL ECONOMICS Quiz 1.docx
  • University of Maryland, University College
  • ECON 201

    Fall 2013

ECON 201 KEYNESIAN & NEOCLASSICAL ECONOMICS Quiz 1.docx

6 pages
econ_201_questions

  • If Johns consumption expenditure increases from 2500 to 3500 when his
  • Great Basin College
  • ECONOMICS 300

    Fall 2016

econ_201_questions

11 pages
Module 8 - Policy

  • PreviousNext Choose the BEST answer Holding all else constant while government
  • University of Maryland, College Park
  • ECON 201

    Fall 2015

Module 8 – Policy

9 pages
Macroeconomics Practice Questions Module_ Keynesian-Neoclassical Economics.docx

  • Macroeconomics Practice Questions Module_ Keynesian-Neoclassical Economics.docx
  • Broward College
  • MICRO MCB2010

    Fall 2011

Macroeconomics Practice Questions Module_ Keynesian-Neoclassical Economics.docx

[ snackBarMessage ]

2/3

PREVIEWS LEFT

Sign up to access 24/7 study resources for your classes
Sign Up
Log in

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran
    Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana
    University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill
    Tulane University ‘16, Course Hero Intern