Paul Pecorino - EC 111
Row _ Seat _
Exam 1 Spring 2012
Identify the letter of the choice that best completes the statement or answers the question. Mark your answers on
your scantron sheet.
1. A market will experience a _ when
Chapter 9 - Demand-Side Equilibrium
The equilibrium level of GDP on the demand side is the one at
which total spending equals production . In such a situation,
firms find their inventories remaining at desired levels, so they
have no incentive to change
Chapter 6 - The Goals of Macroeconomic Policy
I. THE GOAL OF ECONOMIC GROWTH
Potential GDP - The real output that the economy would
produce if its labor and other resources were fully employed.
Full employment of labor does not imply a zero rate of
Chapter 5 An Introduction to Macroeconomics
Microeconomics deals with individuals, individual firms and
individual industries. Macroeconomics deals with aggregates.
Aggregation combines individual markets into one overall
Chapter 10 - The Supply Side
The position of the expenditure schedule in the 450 diagram
depends upon the price level. The price level in turn depends
upon AD and AS.
As the price level rises, more output is produced, other things
held constant. One
Chapter 8 Aggregate Demand and Consumption
Aggregate Demand is the total amount that all consumers,
business firms, and government agencies are willing to spend on
final goods and services.
COMPONENTS OF AD:
Consumer Expenditure (C) is the total amount