Question 1

If total spending is less than total output,then price levels will

Accepted Answer

A)  rise and output will increase. 
B)  rise and output will decrease. 
C)  fall and output will increase. 
D)  fall and output will decrease. 
A)  rise and output will increase. 
B)  rise and output will decrease. 
C)  fall and output will increase. 
D)  fall and output will decrease.

Question 2

In a simple economy (no government sector),the equilibrium level of GDP will be less than the full employment level of income if,at the full employment level of income,the

Accepted Answer

A)  saving that consumers want to do is less than investing that businesses want to do. 
B)  saving that consumers want to do is greater than investing that businesses want to do. 
C)  saving that consumers want to do is less than spending that consumers want to do. 
D)  inventories are being depleted. 
A)  saving that consumers want to do is less than investing that businesses want to do. 
B)  saving that consumers want to do is greater than investing that businesses want to do. 
C)  saving that consumers want to do is less than spending that consumers want to do. 
D)  inventories are being depleted.

Question 3

In a simplified circular flow model with no government,in equilibrium,S = I + (X − IM).

Accepted Answer

A) True 
 B)False

Question 4

Recessions and depressions are the principal examples of

Accepted Answer

A)  market failure. 
B)  coordination failure. 
C)  central planning. 
D)  socialist contradictions. 
A)  market failure. 
B)  coordination failure. 
C)  central planning. 
D)  socialist contradictions.

Question 5

The effect throughout the entire economy of one individual's increase in spending will be

Accepted Answer

A)  less than the individual's spending. 
B)  equal to the individual's spending. 
C)  greater than the individual's spending. 
D)  offset by another individual's saving. 
A)  less than the individual's spending. 
B)  equal to the individual's spending. 
C)  greater than the individual's spending. 
D)  offset by another individual's saving.

Question 6

Economists are very good at explaining how individual markets work.Economists are less successful at explaining

Accepted Answer

A)  market pricing. 
B)  recessions and inflation. 
C)  central planning. 
D)  business firm profits. 
A)  market pricing. 
B)  recessions and inflation. 
C)  central planning. 
D)  business firm profits.

Question 7

The full employment level of GDP is sometimes referred to as "potential GDP."

Accepted Answer

A) True 
 B)False

Question 8

Workers in a nearby pizza restaurant may indirectly enjoy income increases from a nearby construction process.

Accepted Answer

A) True 
 B)False

Question 9

The equilibrium level of GDP is the level at which

Accepted Answer

A)  aggregate demand exceeds output. 
B)  aggregate demand equals output. 
C)  aggregate demand is less than output. 
D)  inventories are being depleted to meet demand. 
A)  aggregate demand exceeds output. 
B)  aggregate demand equals output. 
C)  aggregate demand is less than output. 
D)  inventories are being depleted to meet demand.

Question 10

If total spending exceeds total output,then

Accepted Answer

A)  inventory levels will rise. 
B)  inventory levels will remain constant. 
C)  inventory levels will fall. 
D)  output will eventually decrease. 
A)  inventory levels will rise. 
B)  inventory levels will remain constant. 
C)  inventory levels will fall. 
D)  output will eventually decrease.

Question 11

When equilibrium GDP falls below potential GDP,an inflationary gap exists.

Accepted Answer

A) True 
 B)False

Question 12

If,at the full employment level of income,the amount that businesses plan to invest is greater than the amount that consumers plan to save,then

Accepted Answer

A)  there will be an inflationary gap. 
B)  there will be a deflationary gap. 
C)  total demand will fall short of potential GDP. 
D)  the economy will suffer from increasing unemployment. 
A)  there will be an inflationary gap. 
B)  there will be a deflationary gap. 
C)  total demand will fall short of potential GDP. 
D)  the economy will suffer from increasing unemployment.

If total spending is less than total output,then price levels will

In a simple economy (no government sector),the equilibrium level of GDP will be less than the full employment level of income if,at the full employment level of income,the

In a simplified circular flow model with no government,in equilibrium,S = I + (X − IM).

Recessions and depressions are the principal examples of

The effect throughout the entire economy of one individual's increase in spending will be

Economists are very good at explaining how individual markets work.Economists are less successful at explaining

The full employment level of GDP is sometimes referred to as "potential GDP."

Workers in a nearby pizza restaurant may indirectly enjoy income increases from a nearby construction process.

The equilibrium level of GDP is the level at which

If total spending exceeds total output,then

When equilibrium GDP falls below potential GDP,an inflationary gap exists.

If,at the full employment level of income,the amount that businesses plan to invest is greater than the amount that consumers plan to save,then

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 9: Demand Side Equilibrium Unemployment Or Inflation

If total spending is less than total output,then price levels will

In a simple economy (no government sector),the equilibrium level of GDP will be less than the full employment level of income if,at the full employment level of income,the

In a simplified circular flow model with no government,in equilibrium,S = I + (X − IM).

Recessions and depressions are the principal examples of

The effect throughout the entire economy of one individual's increase in spending will be

Economists are very good at explaining how individual markets work.Economists are less successful at explaining

The full employment level of GDP is sometimes referred to as "potential GDP."

Workers in a nearby pizza restaurant may indirectly enjoy income increases from a nearby construction process.

The equilibrium level of GDP is the level at which

If total spending exceeds total output,then

When equilibrium GDP falls below potential GDP,an inflationary gap exists.

If,at the full employment level of income,the amount that businesses plan to invest is greater than the amount that consumers plan to save,then

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters