Exam 8: The Business Cycle

The growth path of the US economy is considered to be

If the level of prices and output are compatible with both buyers' and sellers' intentions,then the policy goals are satisfied.

A recession can be represented by a point

Using Figure 8.1,a decrease in the quantity of aggregate demand resulting from the interest rate effect would be depicted as a movement from point

If wages and prices are flexible,then a recession is best eliminated when prices

In Figure 8.2,an increase in the cost of an input in the production process is best represented as a movement from point

A tax cut can best be characterized as

Is equilibrium always at an optimal level of output? Explain your answer.

Current buyers' and sellers' behaviors are correctly expressed by

The real balances effect says that an increase in the price level

During the Great Depression,this group of economists assured everyone that the setbacks in production and employment were temporary and would soon vanish:

Which of the following caused a recession in the years immediately following World War II?

Given AD₂ and AS₁,the equilibrium price level in Figure 8.3 is

Macro equilibrium is established at which level of real output,given AD₁ and AS₂ in Figure 8.3?

The quantity of real output supplied rises as the price level rises,ceteris paribus.

Macro equilibrium always occurs when

Which of the following was not characteristic of the U.S.economy during the Great Depression?

If the current macroequilibrium is below an output level of that associated with full employment,how would the current equilibrium be impacted by a rightward shift of the aggregate supply curve,ceteris paribus?

A vertical aggregate supply curve

The profit effect occurs because,in the short run,resource costs typically do not increase as rapidly as the price of goods and services.