Exam 5: Introduction to Macroeconomics

If business leaders become optimistic about future sales and profits,they will __________ spending on plant and equipment,which __________ employment and income and,therefore,their expectations are __________.

Fine-tuning the economy means

By a leading economic indicator,economists mean

Stagflation refers to

Economic fluctuations (or business cycles)

Inflation is

The Reagan tax cut of 1981 was an attempt at supply-side economics.

A recession is best defined as a period during which

If tax revenues increase more than government spending does,the price level will rise.

Stagflation refers to

While economic expansions average about three and one half years in duration,economic contractions average about

According to Keynes,"animal spirits"

Which decade is known as the "Golden Age of Keynesian Economics"?

Exhibit 5-2 -Refer to Exhibit 5-2.Which line or point represents the price level?

Exhibit 5-1 -In Exhibit 5-1,what happens to the equilibrium price level in period 1 as the aggregate demand curve shifts from AD to AD'

Keynesian demand management policies are not effective in fighting stagflation.

According to John Maynard Keynes' General Theory of Employment,Interest and Money,in order to get an economy out of a depression,the government should

Adam Smith's "invisible hand" explains

The aggregate supply curve reflects the direct relationship between the price level and the quantity of aggregate output supplied.

Equilibrium of aggregate supply and aggregate demand is best described as a situation in which