sumhw2 - sumhw2 Multiple Choice Identify the choice that...

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sumhw2 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. During a recession the economy experiences a. rising employment and income. b. rising employment and falling income. c. rising income and falling employment. d. falling employment and income. 2. Which of the following is correct? a. Economic fluctuations are easily predicted by competent economists. b. Recessions have never occurred very close together. c. Other measures of spending, income, and production do not fluctuate closely with real GDP. d. None of the above is correct. 3. Most economists use the aggregate demand and aggregate supply model primarily to analyze a. short-run fluctuations in the economy. b. the effects of macroeconomic policy on the prices of individual goods. c. the long-run effects of international trade policies. d. productivity and economic growth. 4. Real GDP a. is the current dollar value of all goods produced by the citizens of an economy within a given time. b. measures economic activity and income. c. is used primarily to measure long-run trends rather than short-run fluctuations. d. All of the above are correct. 5. As recessions begin, production a. and unemployment both rise. b. rises and unemployment falls. c. falls and unemployment rises. d. and unemployment both fall. 6. Which of the following is correct concerning recessions? a. They come at fairly regular and predictable intervals. b. They are associated with comparatively large declines in investment spending. c. They are any period when real GDP growth is less than average. d. They tend to be associated with falling unemployment rates. 7. Which part of real GDP fluctuates most over the course of the business cycle? a. consumption expenditures b. government expenditures c. investment expenditures d. net exports 8. In 2001, the United States was in recession. Which of the following things would you expect not to have happened? a. increased layoffs and firings b. a higher rate of bankruptcy c. increased claims for unemployment insurance d. increased investment spending
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9. The model of short-run economic fluctuations focuses on the price level and a. real GDP. b. economic growth. c. the neutrality of money. d. None of the above is correct. 10. The average price level is measured by a. any real variable. b. the rate of inflation. c. the level of the money supply. d. the CPI or the GDP deflator. 11. The model of aggregate demand and aggregate supply explains the relationship between a. the price and quantity of a particular good. b. unemployment and output. c. wages and employment. d. real GDP and the price level. 12. The variables on the vertical and horizontal axes of the aggregate demand and supply graph are a. the price level, real output. b.
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sumhw2 - sumhw2 Multiple Choice Identify the choice that...

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