{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Macro 3 - HW 3 REVIEW Questions that many students got...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
HW 3 REVIEW – Questions that many students got wrong – and Answers in capitals ____ 1. Large or persistent inflation is almost always caused by a. excessive government spending. b. excessive growth in the quantity of money. c. foreign competition. d. higher-than-normal levels of productivity. B- THIS IS A LONG-RUN QUESTION THAT SNUCK IN; IGNORE FOR NOW (BUT IT MYA POP UP ON A QUIZ OR MIDTERM. MORE LATER ____ 2. In the short run Recessions in South Korea and Indonesia will cause a. the U.S. price level and real GDP to rise. b. the U.S. price level and real GDP to fall. c. the U.S. price level to rise and real GDP to fall. d. the U.S. price level to fall and real GDP to rise. B - A SLOW ECONOMY IN S KOREA WILL CAUSE THEM TO IMPORT LESS U.S. GOODS AND SERVICES - I.E., OUT EXPORTS WIL LFALL, SINCE EXPORTS ARE PART OF U.S. AGG DEMAND, AGG DEMAND WILL FALL AND THUS PRICES AND OUTPUT IN THE U.S. (SKETCH AGG D&S) IF ORIGINALLY AD2 AND SRAS 1 WI EQUILIB AT B, NOW AGG D SHIFTS/FALLS TO AD1 WITH NEW EQUILIB AT A WITH P & Q LOWER. ___ 3. Which of the following would cause prices to fall and output to rise in the short run? ____ 4. Which of the following would cause prices to rise and real GDP to fall in the short run?
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
____ 5. Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient speed and precision, they can offset the initial shift by shifting
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern