Question 1

According to classical economists,most,if not all,markets are competitive.

Accepted Answer

A) True 
 B)False

Question 2

The structural unemployment rate is 3.2 percent,the frictional unemployment rate is 1.8 percent,and the current unemployment rate is 6.3 percent.The economy is in

Accepted Answer

A)  a recessionary gap producing less than Natural Real GDP. 
B)  an inflationary gap producing more than Natural Real GDP. 
C)  long-run equilibrium. 
D)  an inflationary gap producing Natural Real GDP. 
E)  a recessionary gap producing more than Natural Real GDP. 
A)  a recessionary gap producing less than Natural Real GDP. 
B)  an inflationary gap producing more than Natural Real GDP. 
C)  long-run equilibrium. 
D)  an inflationary gap producing Natural Real GDP. 
E)  a recessionary gap producing more than Natural Real GDP.

Question 3

When the economy is in a recessionary gap,the labor market is experiencing a _____________.In a self-regulating economy,wage rates will then ___________ and the ______________ curve will shift __________________.

Accepted Answer

A)  shortage; rise; AD; rightward 
B)  shortage; fall; SRAS; leftward 
C)  surplus; rise; AD; rightward 
D)  shortage; fall; SRAS; rightward 
E)  surplus; fall; SRAS; rightward 
A)  shortage; rise; AD; rightward 
B)  shortage; fall; SRAS; leftward 
C)  surplus; rise; AD; rightward 
D)  shortage; fall; SRAS; rightward 
E)  surplus; fall; SRAS; rightward

Question 4

Which of the following statements is false?

Accepted Answer

A)  If the economy is self-regulating,wages are flexible. 
B)  The frictional unemployment rate equals the natural unemployment rate minus the structural unemployment rate. 
C)  If the economy is producing Natural Real GDP,it is operating at the natural unemployment rate. 
D)  The economy is operating at full employment if it is producing more than Natural Real GDP. 
A)  If the economy is self-regulating,wages are flexible. 
B)  The frictional unemployment rate equals the natural unemployment rate minus the structural unemployment rate. 
C)  If the economy is producing Natural Real GDP,it is operating at the natural unemployment rate. 
D)  The economy is operating at full employment if it is producing more than Natural Real GDP.

Question 5

According to classical economists,if the amount of funds households save is greater than the amount of funds firms invest,then

Accepted Answer

A)  the interest rate will fall,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest. 
B)  the interest rate will rise,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest. 
C)  the interest rate will remain constant and people will simply buy more goods. 
D)  more money will he used for leisure purposes,since households save in order to consume leisure at some later time. 
E)  none of the above 
A)  the interest rate will fall,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest. 
B)  the interest rate will rise,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest. 
C)  the interest rate will remain constant and people will simply buy more goods. 
D)  more money will he used for leisure purposes,since households save in order to consume leisure at some later time. 
E)  none of the above

Question 6

Which of the following is not consistent with a self-regulating economy?

Accepted Answer

A)  flexible prices 
B)  flexible wages 
C)  a labor market in which wages fall if there is a surplus 
D)  a labor market in which wages rise if there is a shortage 
E)  none of the above (all are consistent with a self-regulating economy) 
A)  flexible prices 
B)  flexible wages 
C)  a labor market in which wages fall if there is a surplus 
D)  a labor market in which wages rise if there is a shortage 
E)  none of the above (all are consistent with a self-regulating economy)

Question 7

-Refer to Exhibit 9-5.Imagine an AD curve intersecting an SRAS curve at Point K on graph (1).Which point(s)would this correspond to on graph (2)?

Accepted Answer

A)  A or B 
B)  C 
C)  D or E 
D)  F 
E)  G 
A)  A or B 
B)  C 
C)  D or E 
D)  F 
E)  G

Question 8

The physical production possibilities frontier illustrates the different combinations of goods that society can produce given

Accepted Answer

A)  the constraints of finite resources and the current state of technology. 
B)  a constant price level. 
C)  its institutional constraints. 
D)  the natural rate of unemployment. 
E)  the constraints of finite resources and the current state of technology and institutional constraints. 
A)  the constraints of finite resources and the current state of technology. 
B)  a constant price level. 
C)  its institutional constraints. 
D)  the natural rate of unemployment. 
E)  the constraints of finite resources and the current state of technology and institutional constraints.

Question 9

Which of the following statements is false?

Accepted Answer

A)  The classical economists believed that government should manage the economy. 
B)  The classical economists believed in a policy of laissez-faire. 
C)  The classical economists believed that the economy was self-regulating. 
D)  The classical economists believed equilibrium output would be full-employment output. 
A)  The classical economists believed that government should manage the economy. 
B)  The classical economists believed in a policy of laissez-faire. 
C)  The classical economists believed that the economy was self-regulating. 
D)  The classical economists believed equilibrium output would be full-employment output.

Question 10

If the economy is currently in a recessionary gap,the SRAS curve intersects the AD curve to the left of Natural Real GDP.

Accepted Answer

A) True 
 B)False

Question 11

The classical economists felt that wages and prices were flexible in

Accepted Answer

A)  neither the upward direction nor the downward direction. 
B)  the upward direction but not in the downward direction. 
C)  the downward direction but not in the upward direction. 
D)  both the upward and downward directions. 
A)  neither the upward direction nor the downward direction. 
B)  the upward direction but not in the downward direction. 
C)  the downward direction but not in the upward direction. 
D)  both the upward and downward directions.

Question 12

The classical economists argued that saving is matched by an equal amount of investment because of

Accepted Answer

A)  wage flexibility. 
B)  price flexibility. 
C)  money flexibility. 
D)  interest rate flexibility. 
E)  b and c 
A)  wage flexibility. 
B)  price flexibility. 
C)  money flexibility. 
D)  interest rate flexibility. 
E)  b and c

According to classical economists,most,if not all,markets are competitive.

The structural unemployment rate is 3.2 percent,the frictional unemployment rate is 1.8 percent,and the current unemployment rate is 6.3 percent.The economy is in

When the economy is in a recessionary gap,the labor market is experiencing a _______.In a self-regulating economy,wage rates will then _ and the curve will shift ________.

Which of the following statements is false?

According to classical economists,if the amount of funds households save is greater than the amount of funds firms invest,then

Which of the following is not consistent with a self-regulating economy?

-Refer to Exhibit 9-5.Imagine an AD curve intersecting an SRAS curve at Point K on graph (1).Which point(s)would this correspond to on graph (2)?

The physical production possibilities frontier illustrates the different combinations of goods that society can produce given

Which of the following statements is false?

If the economy is currently in a recessionary gap,the SRAS curve intersects the AD curve to the left of Natural Real GDP.

The classical economists felt that wages and prices were flexible in

The classical economists argued that saving is matched by an equal amount of investment because of

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Exam 9: Perfect Competition

According to classical economists,most,if not all,markets are competitive.

The structural unemployment rate is 3.2 percent,the frictional unemployment rate is 1.8 percent,and the current unemployment rate is 6.3 percent.The economy is in

When the economy is in a recessionary gap,the labor market is experiencing a _____________.In a self-regulating economy,wage rates will then ___________ and the ______________ curve will shift __________________.

Which of the following statements is false?

According to classical economists,if the amount of funds households save is greater than the amount of funds firms invest,then

Which of the following is not consistent with a self-regulating economy?

-Refer to Exhibit 9-5.Imagine an AD curve intersecting an SRAS curve at Point K on graph (1).Which point(s)would this correspond to on graph (2)?

The physical production possibilities frontier illustrates the different combinations of goods that society can produce given

Which of the following statements is false?

If the economy is currently in a recessionary gap,the SRAS curve intersects the AD curve to the left of Natural Real GDP.

The classical economists felt that wages and prices were flexible in

The classical economists argued that saving is matched by an equal amount of investment because of

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

When the economy is in a recessionary gap,the labor market is experiencing a _______.In a self-regulating economy,wage rates will then _ and the curve will shift ________.