Question 1

The U.S.Great Depression began in what year?

Accepted Answer

A)  1927 
B)  1929 
C)  1933 
D)  1939 
A)  1927 
B)  1929 
C)  1933 
D)  1939

Question 2

A significant,widespread decline in real income and employment is called:

Accepted Answer

A)  a recession. 
B)  a boom. 
C)  an aggregate demand fluctuation. 
D)  a business fluctuation. 
A)  a recession. 
B)  a boom. 
C)  an aggregate demand fluctuation. 
D)  a business fluctuation.

Question 3

Expected increases in the price of oil are the most costly to deal with.

Accepted Answer

A) True 
 B)False

Question 4

The aggregate demand curve is a straight line with a slope of _____.

Accepted Answer

A)  0 
B)  1 
C)  -1 
D)  -10 
A)  0 
B)  1 
C)  -1 
D)  -10

Question 5

Economic growth is smooth in:

Accepted Answer

A)  developed countries only. 
B)  both developed and developing countries. 
C)  developing countries only. 
D)  neither developed nor developing countries. 
A)  developed countries only. 
B)  both developed and developing countries. 
C)  developing countries only. 
D)  neither developed nor developing countries.

Question 6

Which of the following would NOT shift the long-run aggregate supply curve?

Accepted Answer

A)  wars 
B)  increases in technology 
C)  strikes 
D)  an increase in the money supply 
A)  wars 
B)  increases in technology 
C)  strikes 
D)  an increase in the money supply

Question 7

Each aggregate demand curve contains only one combination of inflation and real growth that leads to a distinct level of spending.

Accepted Answer

A) True 
 B)False

Question 8

In the equation $\vec { M } + \vec { v } = \vec { P } + \vec { Y } _ { R }$ ,what does $\vec { Y } _ { R }$ stand for?

Accepted Answer

A)  real GDP 
B)  nominal GDP 
C)  growth in real GDP growth 
D)  growth in nominal GDP growth 
A)  real GDP 
B)  nominal GDP 
C)  growth in real GDP growth 
D)  growth in nominal GDP growth

Question 9

During periods of real shocks,the long-run aggregate supply curve will remain the same in the short term and the long run.

Accepted Answer

A) True 
 B)False

Question 10

A recession is defined as a widespread decline in:

Accepted Answer

A)  real income (GDP). 
B)  inflation. 
C)  unemployment. 
D)  mortgage defaults. 
A)  real income (GDP). 
B)  inflation. 
C)  unemployment. 
D)  mortgage defaults.

Question 11

Sustained inflation:

Accepted Answer

A)  can occur as a result of changes in
$\vec { C }$ . 
B)  can occur as a result of changes in
$\vec { I }$ . 
C)  requires ongoing increases in the money supply. 
D)  can never occur. 
A)  can occur as a result of changes in
$\vec { C }$ . 
B)  can occur as a result of changes in
$\vec { I }$ . 
C)  requires ongoing increases in the money supply. 
D)  can never occur.

Question 12

Variations in real GDP growth around its trend growth rate are called:

Accepted Answer

A)  business fluctuations. 
B)  recessions. 
C)  inflation variations. 
D)  Solow growth rates. 
A)  business fluctuations. 
B)  recessions. 
C)  inflation variations. 
D)  Solow growth rates.

Question 13

In 1931,the Federal Reserve:

Accepted Answer

A)  successfully lessened the severity of the Great Depression. 
B)  held aggregate demand steady in response to the stock market crash. 
C)  acted aggressively to counter the effects of the banking crisis. 
D)  failed to respond to the banking crisis. 
A)  successfully lessened the severity of the Great Depression. 
B)  held aggregate demand steady in response to the stock market crash. 
C)  acted aggressively to counter the effects of the banking crisis. 
D)  failed to respond to the banking crisis.

Question 14

The aggregate demand curve shows all the combinations of _____ and _____ that are consistent with a specified rate of _____.

Accepted Answer

A)  prices;real GDP;spending 
B)  prices;GNP;money supply 
C)  inflation;nominal growth;money supply 
D)  inflation;real GDP growth;spending growth 
A)  prices;real GDP;spending 
B)  prices;GNP;money supply 
C)  inflation;nominal growth;money supply 
D)  inflation;real GDP growth;spending growth

Question 15

In the AD-AS model, $\bar { Y } _ { R }$ represents the:

Accepted Answer

A)  growth rate of real GDP. 
B)  level of real GDP. 
C)  reference year. 
D)  growth rate of the money supply. 
A)  growth rate of real GDP. 
B)  level of real GDP. 
C)  reference year. 
D)  growth rate of the money supply.

Question 16

For an aggregate demand curve with $\vec { M }$ = 10% and $\vec { v }$ = 0%,if inflation is 6%,then real growth is:

Accepted Answer

A)  -6%. 
B)  -4%. 
C)  4%. 
D)  16%. 
A)  -6%. 
B)  -4%. 
C)  4%. 
D)  16%.

Question 17

Use the following to answer questions 
Figure: Aggregate Demand  
-(Figure: Aggregate Demand)Point A on this aggregate demand curve represents a real GDP growth rate of:

Accepted Answer

A)  2%. 
B)  3%. 
C)  5%. 
D)  7%. 
A)  2%. 
B)  3%. 
C)  5%. 
D)  7%.

Question 18

The short-run aggregate supply curve shows that higher-than-expected-inflation will increase output and lower-than-expected-inflation will decrease output.

Accepted Answer

A) True 
 B)False

Question 19

An increase in the money supply is an example of a real shock.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is NOT a positive aggregate demand shock?

Accepted Answer

A)  a faster money growth 
B)  decreased import growth 
C)  lower growth of government spending 
D)  increased wealth 
A)  a faster money growth 
B)  decreased import growth 
C)  lower growth of government spending 
D)  increased wealth

Exam 13: Business Fluctuations

The U.S.Great Depression began in what year?

A significant,widespread decline in real income and employment is called:

Expected increases in the price of oil are the most costly to deal with.

The aggregate demand curve is a straight line with a slope of _____.

Economic growth is smooth in:

Which of the following would NOT shift the long-run aggregate supply curve?

Each aggregate demand curve contains only one combination of inflation and real growth that leads to a distinct level of spending.

In the equation M⃗+v⃗=P⃗+Y⃗R\vec { M } + \vec { v } = \vec { P } + \vec { Y } _ { R }M+v=P+YR​ ,what does Y⃗R\vec { Y } _ { R }YR​ stand for?

During periods of real shocks,the long-run aggregate supply curve will remain the same in the short term and the long run.

A recession is defined as a widespread decline in:

Sustained inflation:

Variations in real GDP growth around its trend growth rate are called:

In 1931,the Federal Reserve:

The aggregate demand curve shows all the combinations of _____ and _____ that are consistent with a specified rate of _____.

In the AD-AS model, YˉR\bar { Y } _ { R }YˉR​ represents the:

For an aggregate demand curve with M⃗\vec { M }M = 10% and v⃗\vec { v }v = 0%,if inflation is 6%,then real growth is:

Use the following to answer questions Figure: Aggregate Demand -(Figure: Aggregate Demand)Point A on this aggregate demand curve represents a real GDP growth rate of:

The short-run aggregate supply curve shows that higher-than-expected-inflation will increase output and lower-than-expected-inflation will decrease output.

An increase in the money supply is an example of a real shock.

Which of the following is NOT a positive aggregate demand shock?

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

In the equation $\vec { M } + \vec { v } = \vec { P } + \vec { Y } _ { R }$ ,what does $\vec { Y } _ { R }$ stand for?

The aggregate demand curve shows all the combinations of ___ and _ that are consistent with a specified rate of ___.

In the AD-AS model, $\bar { Y } _ { R }$ represents the:

For an aggregate demand curve with $\vec { M }$ = 10% and $\vec { v }$ = 0%,if inflation is 6%,then real growth is: