2020 -- Quiz 7 - Name: _ Date: _ ECO 2020 (902) 11656...

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Name: ____________________________________________________ Date: ___________________ ECO 2020 (902) 11656 QUIZ 7 Wayne State University Instructor: Jinghua Huang Fall 2011 Multiple-Choice Questions: Identify the letter of the choice that best completes the statement or answers the question. 1. The long run is usually A) ten years or more. B) two to three years. C) one to two years. D) four to five years or more. E) one year. 2. The initial response of real GDP to a change in aggregate spending is referred to as A) a depression. B) a boom. C) a recession. D) the short run. E) a recovery. 3. When government purchases decrease, the short-run effect can be described as the period of time when A) there is no spending balance. B) inflation is constant. C) real GDP and inflation are adjusting to their new long-run levels. D) real GDP is below potential GDP. E) the inflation adjustment line has not reached the new intersection of aggregate demand at the level of potential GDP. 4. The long-run effects of an increase in government purchases are that interest rates will __________, inflation will ___________, and real GDP will ____________. A)
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2020 -- Quiz 7 - Name: _ Date: _ ECO 2020 (902) 11656...

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