ec_Chapter 9 - Chapter 9 1 Over the business cycle...

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Chapter 9 1. Over the business cycle, investment spending ______ consumption spending. A) is inversely correlated with B) is more volatile than C) has about the same volatility as D) is less volatile than 2. When GDP growth declines, investment spending typically ______ and consumption spending typically ______. A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases 3. Long-run growth in real GDP is determined primarily by ______, while short-run movements in real GDP are associated with ______. A) variations in labor-market utilization; technological progress B) technological progress; variations in labor-market utilization C) money supply growth rates; changes in velocity D) changes in velocity; money supply growth rates 4. Measures of average workweeks and of vendor performance are included in the index of leading indicators, because shorter workweeks tend to indicate ______ future economic activity and slower deliveries tend to indicate ______ future economic activity. A) stronger; stronger B) stronger; weaker C) weaker; stronger D) weaker; weaker 5. A difference between the economic long run and the short run is that: A) the classical dichotomy holds in the short run but not in the long run. B) monetary and fiscal policy affect output only in the long run. C) demand can affect output and employment in the short run, whereas supply is the ruling force in the long run. D) prices and wages are sticky in the long run only. Page 1 6. The aggregate demand curve is the ______ relationship between the quantity of output demanded and the ______. A) positive; money supply B) negative; money supply C) positive; price level D) negative; price level 7. According to the quantity theory of money, if output is higher, ______ real balances
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This note was uploaded on 11/28/2010 for the course ECO 2013 taught by Professor Patconroy during the Summer '08 term at Miami Dade College, Miami.

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ec_Chapter 9 - Chapter 9 1 Over the business cycle...

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