Question 1

The classical model explains away unemployment as a long-run problem by assuming that

Accepted Answer

A)  coordination in labor markets will occur within an acceptable period of time 
B)  the economy consists of multiple,coordinated sectors 
C)  it causes firms to cut back on their long-run production plans 
D)  what is a problem during one period will seem more like an opportunity for economic growth during another period 
E)  higher saving will stimulate increased investment 
A)  coordination in labor markets will occur within an acceptable period of time 
B)  the economy consists of multiple,coordinated sectors 
C)  it causes firms to cut back on their long-run production plans 
D)  what is a problem during one period will seem more like an opportunity for economic growth during another period 
E)  higher saving will stimulate increased investment

Question 2

Which of the following best defines an expansion?

Accepted Answer

A)  Real GDP is below its potential level. 
B)  Real GDP is increasing. 
C)  Unemployment is unusually high. 
D)  Real GDP is decreasing. 
E)  Real GDP exceeds its potential level. 
A)  Real GDP is below its potential level. 
B)  Real GDP is increasing. 
C)  Unemployment is unusually high. 
D)  Real GDP is decreasing. 
E)  Real GDP exceeds its potential level.

Question 3

Which of the following occurs during an expansion?

Accepted Answer

A)  Output rises,employment rises and unemployment falls. 
B)  Output falls,employment rises and unemployment falls. 
C)  Output rises,employment falls and unemployment falls. 
D)  Output rises,employment rises and unemployment rises. 
E)  Output rises,employment rises and tax revenues fall.. 
A)  Output rises,employment rises and unemployment falls. 
B)  Output falls,employment rises and unemployment falls. 
C)  Output rises,employment falls and unemployment falls. 
D)  Output rises,employment rises and unemployment rises. 
E)  Output rises,employment rises and tax revenues fall..

Question 4

A shock to the economy is a change in

Accepted Answer

A)  production that only affects a few sectors 
B)  production that initially affects the whole economy and then one or more sectors 
C)  spending or production that initially affects one or more sectors and then spreads throughout the whole economy 
D)  spending that only affects a few sectors 
E)  spending that initially affects the whole economy and then one or more sectors 
A)  production that only affects a few sectors 
B)  production that initially affects the whole economy and then one or more sectors 
C)  spending or production that initially affects one or more sectors and then spreads throughout the whole economy 
D)  spending that only affects a few sectors 
E)  spending that initially affects the whole economy and then one or more sectors

Question 5

Suppose a report on the internet indicates that job prospects for graduates are bright because full employment is achieved automatically.Economists are likely to

Accepted Answer

A)  be disappointed in the degree of economic understanding possessed by the author of the report 
B)  be excited about the earning potential of new entrants into the labor market 
C)  be anxious about inflationary indicators 
D)  anticipate a recession 
E)  encourage a tax cut to stimulate the economy 
A)  be disappointed in the degree of economic understanding possessed by the author of the report 
B)  be excited about the earning potential of new entrants into the labor market 
C)  be anxious about inflationary indicators 
D)  anticipate a recession 
E)  encourage a tax cut to stimulate the economy

Question 6

What would a rightward shift of the labor demand curve indicate?

Accepted Answer

A)  Firms want to hire more workers than before at any given wage rate. 
B)  Households want to supply more hours of work than before at any given wage rate. 
C)  Firms want to pay a lower wage rate than before at any given level of employment. 
D)  Households want to supply fewer hours of work than before at any given wage rate. 
E)  Firms want to hire less workers than before at any given wage rate. 
A)  Firms want to hire more workers than before at any given wage rate. 
B)  Households want to supply more hours of work than before at any given wage rate. 
C)  Firms want to pay a lower wage rate than before at any given level of employment. 
D)  Households want to supply fewer hours of work than before at any given wage rate. 
E)  Firms want to hire less workers than before at any given wage rate.

Question 7

If workers become less productive,which of the following would happen in the labor market?

Accepted Answer

A)  Labor supply would decrease. 
B)  Labor supply would increase. 
C)  Labor demand would decrease and labor supply would increase. 
D)  Labor demand would increase and so would labor supply. 
E)  Labor demand would decrease. 
A)  Labor supply would decrease. 
B)  Labor supply would increase. 
C)  Labor demand would decrease and labor supply would increase. 
D)  Labor demand would increase and so would labor supply. 
E)  Labor demand would decrease.

Question 8

GDP as predicted by the classical model is

Accepted Answer

A)  lower than the actual level of GDP 
B)  higher than the actual level of GDP 
C)  smoother and steadier than actual GDP 
D)  more unstable over time than actual GDP 
E)  an accurate predictor of actual GDP 
A)  lower than the actual level of GDP 
B)  higher than the actual level of GDP 
C)  smoother and steadier than actual GDP 
D)  more unstable over time than actual GDP 
E)  an accurate predictor of actual GDP

Question 9

A student seeking a job right after graduation should be especially attentive to

Accepted Answer

A)  long-run growth patterns in the economy 
B)  what is the current phase of the business cycle 
C)  technological change 
D)  sales of durable goods 
E)  the duration of strikes 
A)  long-run growth patterns in the economy 
B)  what is the current phase of the business cycle 
C)  technological change 
D)  sales of durable goods 
E)  the duration of strikes

Question 10

A shock that could trigger a recession is a

Accepted Answer

A)  large military buildup 
B)  large increase in the price of oil 
C)  sudden unexplained increase in consumption 
D)  new technological breakthrough 
E)  large decrease in the price of oil 
A)  large military buildup 
B)  large increase in the price of oil 
C)  sudden unexplained increase in consumption 
D)  new technological breakthrough 
E)  large decrease in the price of oil

Question 11

Since 1960,real GDP has fluctuated to some extent;however,there has been virtually no overall growth when the entire time span is considered.

Accepted Answer

A) True 
 B)False

Question 12

The 2001-2007 economic expansion began when a change in Federal Reserve policy and other global conditions caused interest rates to drop and stay low.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following shocks is most likely to cause an expansion?

Accepted Answer

A)  Defense spending falls 
B)  Defense spending rises 
C)  Defense spending rises and then falls 
D)  Oil prices surge upward 
E)  Oil prices rise slowly 
A)  Defense spending falls 
B)  Defense spending rises 
C)  Defense spending rises and then falls 
D)  Oil prices surge upward 
E)  Oil prices rise slowly

Question 14

Which of the following is the main weakness of the classical model?

Accepted Answer

A)  It assumes that the labor supply curve is vertical. 
B)  It assumes that the labor supply curve is horizontal. 
C)  It assumes that the labor market clears. 
D)  It assumes that the labor demand curve is horizontal. 
E)  It assumes that the labor demand curve is vertical. 
A)  It assumes that the labor supply curve is vertical. 
B)  It assumes that the labor supply curve is horizontal. 
C)  It assumes that the labor market clears. 
D)  It assumes that the labor demand curve is horizontal. 
E)  It assumes that the labor demand curve is vertical.

Question 15

Which of the following shocks could trigger an expansion?

Accepted Answer

A)  A large cut-back in military spending. 
B)  A large increase in the price of oil. 
C)  A sudden decrease in consumption. 
D)  A large military buildup. 
E)  A sudden decrease in investment. 
A)  A large cut-back in military spending. 
B)  A large increase in the price of oil. 
C)  A sudden decrease in consumption. 
D)  A large military buildup. 
E)  A sudden decrease in investment.

Question 16

A period during which GDP exceeds its potential level is best known as a(n)

Accepted Answer

A)  expansion 
B)  contraction 
C)  boom 
D)  recession 
E)  depression 
A)  expansion 
B)  contraction 
C)  boom 
D)  recession 
E)  depression

Question 17

Which of the following defines a recession?

Accepted Answer

A)  Real GDP is increasing. 
B)  Real GDP is decreasing. 
C)  Real GDP is below its full employment level. 
D)  Unemployment is unusually low. 
E)  Employment growth is positive. 
A)  Real GDP is increasing. 
B)  Real GDP is decreasing. 
C)  Real GDP is below its full employment level. 
D)  Unemployment is unusually low. 
E)  Employment growth is positive.

Question 18

The existence of economic fluctuations makes it clear that

Accepted Answer

A)  we should stimulate the economy with tax cuts 
B)  recessions are caused by shifts in labor supply 
C)  we should pass a balanced budget amendment to the U.S.Constitution 
D)  we need active monetary regulation 
E)  the classical model has a flaw 
A)  we should stimulate the economy with tax cuts 
B)  recessions are caused by shifts in labor supply 
C)  we should pass a balanced budget amendment to the U.S.Constitution 
D)  we need active monetary regulation 
E)  the classical model has a flaw

Question 19

Which of the following statements best describes the U.S.economy since 1960?

Accepted Answer

A)  Potential output has risen steadily,but actual output has fluctuated above and below full-employment output. 
B)  Actual output has risen steadily,but potential output has fluctuated above and below actual output. 
C)  Potential output and actual output have both not risen steadily. 
D)  Potential output and actual output have both fluctuated above and below what the classical model predicts. 
E)  Potential output has remained constant but actual output has risen. 
A)  Potential output has risen steadily,but actual output has fluctuated above and below full-employment output. 
B)  Actual output has risen steadily,but potential output has fluctuated above and below actual output. 
C)  Potential output and actual output have both not risen steadily. 
D)  Potential output and actual output have both fluctuated above and below what the classical model predicts. 
E)  Potential output has remained constant but actual output has risen.

Question 20

During recessions,output

Accepted Answer

A)  and unemployment both fall 
B)  and unemployment both rise 
C)  rises,but unemployment falls 
D)  falls,but unemployment rises 
E)  rises and unemployment remains constant 
A)  and unemployment both fall 
B)  and unemployment both rise 
C)  rises,but unemployment falls 
D)  falls,but unemployment rises 
E)  rises and unemployment remains constant

The classical model explains away unemployment as a long-run problem by assuming that

Which of the following best defines an expansion?

Which of the following occurs during an expansion?

A shock to the economy is a change in

Suppose a report on the internet indicates that job prospects for graduates are bright because full employment is achieved automatically.Economists are likely to

What would a rightward shift of the labor demand curve indicate?

If workers become less productive,which of the following would happen in the labor market?

GDP as predicted by the classical model is

A student seeking a job right after graduation should be especially attentive to

A shock that could trigger a recession is a

Since 1960,real GDP has fluctuated to some extent;however,there has been virtually no overall growth when the entire time span is considered.

The 2001-2007 economic expansion began when a change in Federal Reserve policy and other global conditions caused interest rates to drop and stay low.

Which of the following shocks is most likely to cause an expansion?

Which of the following is the main weakness of the classical model?

Which of the following shocks could trigger an expansion?

A period during which GDP exceeds its potential level is best known as a(n)

Which of the following defines a recession?

The existence of economic fluctuations makes it clear that

Which of the following statements best describes the U.S.economy since 1960?

During recessions,output

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 10: Economic Fluctuations

The classical model explains away unemployment as a long-run problem by assuming that

Which of the following best defines an expansion?

Which of the following occurs during an expansion?

A shock to the economy is a change in

Suppose a report on the internet indicates that job prospects for graduates are bright because full employment is achieved automatically.Economists are likely to

What would a rightward shift of the labor demand curve indicate?

If workers become less productive,which of the following would happen in the labor market?

GDP as predicted by the classical model is

A student seeking a job right after graduation should be especially attentive to

A shock that could trigger a recession is a

Since 1960,real GDP has fluctuated to some extent;however,there has been virtually no overall growth when the entire time span is considered.

The 2001-2007 economic expansion began when a change in Federal Reserve policy and other global conditions caused interest rates to drop and stay low.

Which of the following shocks is most likely to cause an expansion?

Which of the following is the main weakness of the classical model?

Which of the following shocks could trigger an expansion?

A period during which GDP exceeds its potential level is best known as a(n)

Which of the following defines a recession?

The existence of economic fluctuations makes it clear that

Which of the following statements best describes the U.S.economy since 1960?

During recessions,output

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters