Exam 8: The Business Cycle

A supply-side policy approach in Figure 8.3,given AD₁ and AS₁,to achieve both lower prices and more output would be to

Choose the letter below that best represents the type of shift that would occur in the following situation in the United States: Between 1995 and 2000,the stock market's value increased significantly,adding billions of dollars to the wealth of U.S.households and businesses.(See Figure 8.6. )

Which of the following is a potential problem at macro equilibrium?

Choose the letter below that best represents the type of shift that would occur in the following situation in the United States: When the economy overheated,the U.S.government cooled it down with higher taxes,spending reductions,and less money.(See Figure 8.6. )

According to the classical view,if consumer demand slowed down,

Assuming full employment is at the intersection of AD₃ with the aggregate supply curve for the economy depicted in Figure 8.7,the worst unemployment problem would exist when AD is located at

Before the year 2000,the most prolonged departure from the long-term growth path for the United States occurred during

The short-run aggregate supply curve is upward-sloping,while the long-run aggregate supply curve tends to be vertical.

Which of the following is a basic macro policy strategy?

Which of the following would result if the price level were below the equilibrium level?

Which combination of shifts of aggregate demand and supply would definitely cause an increase in real GDP?

Who believed that small disturbances in output,prices,or unemployment were likely to be magnified by the invisible hand of the marketplace?

Alternating periods of economic growth and contraction are