Exam 5: Introduction to Macroeconomics

Exhibit 5-3 -In Exhibit 5-3 AD₁ and AS₁ represent the initial aggregate demand and aggregate supply.The equilibrium is initially represented by which point?

Properly applied,a federal budget deficit can simultaneously reduce inflation and unemployment.

If the economy experiences stagflation,

Exhibit 5-1 -In Exhibit 5-1,in period 1 the equilibrium GDP falls from 10,000 to 6,000 when aggregate demand falls from AD to AD'.

When economists refer to the economy's price level,they mean

The aggregate demand curve slopes downward because

In U.S.history,recessions have usually lasted longer than expansion periods.

During a given period in the economy,aggregate output is the

Long-term growth in production can be partially explained by

A period of sustained decline of output in the economy is known as a(n)

A depression can be defined as

According to Keynes,the policy of incurring budget surpluses will cause the equilibrium price level to __________ and equilibrium output to __________.

An increase in the price level

Long-term growth in production can be partially explained by

Stagflation is a situation with high unemployment rates,high inflation rates,and little or no growth in the economy.

Exhibit 5-3 -In Exhibit 5-3 AD₁ and AS₁ represent the initial aggregate demand and aggregate supply.The equilibrium price level and real GDP is?

An increase in wage rates,other things constant,would shift the aggregate supply curve upward.

The policy that a nation's economic vitality would spring from the stock of precious metals accumulated in the public treasury is called monetarism.

The longest U.S.expansion on record lasted ten years,from

Government debt is a flow variable; the budget deficit is a stock variable.