Game1 - Name: _ Class: _ Date: _ ID: A game True/False...

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Class: ___________________ Date: __________ ID: A 1 game True/False Indicate whether the statement is true or false. 1. When income rises, total expenditures remain constant. 2. An increase in the U.S. price level (foreign prices held constant) will cause a leftward shift in the aggregate demand curve. 3. When equilibrium GDP is greater than potential GDP, jobs are plentiful and labor is in great demand. 4. GDP in excess of potential GDP will shift the aggregate supply curve to the left and the price level will increase. 5. If the data show that periods of high economic growth rate accompanied by high inflation rates, then changes in aggregate demand are the primary source of economic fluctuations. Multiple Choice Identify the choice that best completes the statement or answers the question. 6. Total output equals total income a. only at equilibrium. b. always. c. only at non-equilibrium levels of income. d. never. 7. 45° line diagrams show how a. investment varies with income. b. expenditures vary with income. c. investment spending rises when GDP rises. d. GDP is affected by government purchases. 8. Given the slope of the aggregate demand curve, real GDP demanded will decrease when a. real income rises. b. real income falls. c. the price level falls. d. the price level rises. 9. The amount by which equilibrium real GDP exceeds full-employment GDP is known as a. stagflation. b. employment. c. a recessionary gap. d. an inflationary gap. 10. The recessionary gap is the a. amount of unemployment compensation required during a recession. b. budget deficit encountered during a recession. c. amount of government spending needed to end a recession. d. distance between the equilibrium level of output and the full employment level of output. 11. In the basic 45-degree line model, what is the effect of a decrease in the price level? a. The expenditure line will shift downward. b. The expenditure line will shift upward. c. There will be movement to the left on the expenditure line. d. There will be movement to the right on the expenditure line. 12. The concept that increases in spending cause larger increases in equilibrium GDP is known as the a. profiler. b.
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This note was uploaded on 04/08/2011 for the course ECON 2003 taught by Professor Staff during the Spring '11 term at Arkansas.

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Game1 - Name: _ Class: _ Date: _ ID: A game True/False...

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