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Econ 104 Final Exam2
Studying based off exam 2
| Question | Answer |
|---|---|
| If planned aggregate expenditure is less than total production _________ | GDP will decrease |
| According to the "Rule of 70," approximately how many years will it take for real GDP per capita to double if the average annual growth rate of real GDP per capita is 5%? | 14 years |
| Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease in aggregate demand? | Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. |
| If stricter immigration laws are imposed and many foreign workers in the United States are forced to go back to their home countries, _________. | the long-run aggregate supply curve will shift to the left. |
| Interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run? | Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise. |
| According to new growth theory, the accumulation of ________ capital is subject to diminishing returns at the ________ level, but not at the level of the economy as a whole. | knowledge; firm |
| An increase in the government budget deficit will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________. | supply; left; rise |
| The demand curve for loanable funds has a ________ slope because the lower the interest rate, the ________ number of investment projects that are profitable, and the ________ the quantity of loanable funds demanded. | negative; greater; greater |
| During an expansion, how do inflation and unemployment typically change? | Inflation rises and unemployment falls. |
| If real GDP per capita in Ireland is estimated to be $7,400 in 2022, what will real GDP per capita be in 2027 if real GDP per capita grows at an annual rate of 2.8%? | $8,496 |
| U.S. net export spending falls when _________ | the growth rate of U.S. GDP is faster than the growth rate of GDP in other countries. |
| Policies to promote growth by increasing saving and investment work through ________ | increasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital. |
| A decrease in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run? | The price level will fall, and the level of GDP will be unaffected. |
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mollypskates
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