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ch-9 sample questions - SAMPLE QUESTIONS CH 9 Student 1...

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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:
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9. Classical economists believe that in the short-run in the real world: 10. Equilibrium income is that level of income: 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:
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