ch-9 sample questions

ch-9 sample questions - SAMPLE QUESTIONS CH - 9 Student: _...

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SAMPLE QUESTIONS CH - 9 Student: ___________________________________________________________________________ 1. Laissez-faire economists favor government intervention in the market process. True False 2. In the AS/AD model, as the price level falls, the holders of money become richer and buy more. This is one reason why the aggregate demand curve is downward sloping. True False 3. The short-run aggregate supply curve is upward sloping in part because increases in aggregate demand cause some firms to increase their price markups. True False 4. If productivity and wages both rise by 3 percent, then the aggregate supply curve shifts up. True False 5. Starting from a long-run equilibrium, an increase in government expenditures increases output in the short- run but not in the long-run. True False 6. Most economists agree that it is possible for fiscal policy to fine tune the economy. True False 7. "Classical economist" is interchangeable with which term? A. Laissez-faire economist. B. Keynesian economist. C. Activist economist. D. Marxian economist. 8. The Classical economists argued that: A. a market economy will not experience unemployment. B. if unemployment occurs it will cure itself because wages and prices will fall. C. aggregate expenditures may be too low. D. if inflation occurs it will cure itself because prices, wages, and interest rates will rise.
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9. Classical economists believe that in the short-run in the real world: A. prices and wages were flexible. B. prices and wages weren't flexible enough to bring about equilibrium in the short-run. C. prices were flexible but wages weren't flexible. D. wages were flexible but prices weren't flexible. 10. Equilibrium income is that level of income: A. the economy always produces. B. toward which the economy gravitates in the short-run. C. an economy is capable of producing without generating accelerating inflation. D. an economy is capable of producing without generating unemployment. 11. In 1984, the personal savings rate rose more than 40%. If the additional savings were not translated into investment, Keynes would predict that aggregate income would: A. decline and remain there. B. rise indefinitely. C. decline, but rise in the future. D. would rise and remain there. 12. The paradox of thrift will not arise if: A. increases in saving are translated into identical increases in investment. B. increases in saving are translated into identical decreases in consumption. C. decreases in saving are translated into identical increases in investment. D. decreases in saving are translated into identical decreases in consumption. 13. An increase in the price level: A. increases the purchasing power of money, and leads to lower interest rates and increases investment. B. increases the purchasing power of money, and leads to higher interest rates and decreases investment.
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This note was uploaded on 12/08/2009 for the course ACCT 101 taught by Professor Jim during the Spring '09 term at CSU Channel Islands.

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ch-9 sample questions - SAMPLE QUESTIONS CH - 9 Student: _...

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