Macro
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| show | the AS-curve would be vertical
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| Assume you buried a $100 bill in a time capsule in 1970 and dug it up 40 years later. What would be its purchasing power in 2010? | show 🗑
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| The AS-curve is horizontal or very flat if | show 🗑
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| show | investment as a share of GDP was below 3 percent
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| show | potential GDP
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| show | the economy always adjusted rapidly to full employment
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| show | thought that nominal wages were rigid even when there was unemployment
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| The Keynesian aggregate supply curve implies that | show 🗑
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| show | firms will always supply the amount of goods demanded at the existing price level
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| In which of the following cases will the AS-curve be horizontal? | show 🗑
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| show | increase the level of output but leave the price level unchanged
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| In the Keynesian supply curve case, a fiscal expansion will | show 🗑
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| show | the AS-curve is more price elastic in the long run than in the short run
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| The AD-AS diagram used in this chapter | show 🗑
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| Which of the following is NOT reflected in a shift of the AD-curve? | show 🗑
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| The slope of the AS-curve becomes steeper | show 🗑
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| show | movement along the AD-curve to the left
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| The natural rate of unemployment is | show 🗑
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| show | unemployment resulting from people shifting between jobs and looking for new jobs
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| If output is at its full-employment level, then | show 🗑
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| A shift of the AD-curve to the left can be caused by | show 🗑
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| In the medium run, if government purchases are increased and nominal money supply is decreased, we can expect that | show 🗑
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| The AD-curve has a negative slope since | show 🗑
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| A shift of the AD-curve to the right could be caused by | show 🗑
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| An increase in aggregate demand can be caused by | show 🗑
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| show | buying bonds in the open market
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| show | increasing government spending
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| show | interest rates will decrease, while output and prices may increase, decrease, or remain the same
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| In an AD-AS diagram with an upward-sloping AS-curve, if a tax decrease is combined with money expansion, | show 🗑
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| If government purchases and taxes are both increased by the same lump sum, we can expect the following in the medium run: | show 🗑
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| show | increase output and the price level but lower the interest rate
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| show | real money balances decrease and real interest rates increase
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| A decrease in nominal money supply will be reflected in | show 🗑
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| Expansionary fiscal policy is very effective in significantly increasing the level of output | show 🗑
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| show | -in the Keynesian case
-in the classical case
-in the medium run
D)all of the above
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| In the classical supply curve case, monetary expansion will | show 🗑
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| Assume investment is very interest sensitive and wages always adjust immediately to maintain an equilibrium in the labor market. Which of the following would be most effective in significantly increasing the level of output? | show 🗑
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| show | if wages adjust rapidly to maintain equilibrium in the labor market
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| show | wages and prices are completely flexible
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| show | the AS-curve is vertical
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| 41. In the AD-AS model, fiscal or monetary policy cannot affect the level of output in | show 🗑
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| The income velocity of money can be calculated using the following formula | show 🗑
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| show | V = 2
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| If restrictive monetary policy leads to a lower price level but leaves real output, employment, and real interest rates unchanged, then | show 🗑
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| show | -a fairly large increase in aggregate demand
-a fairly small increase in aggregate supply
-an increase in the price level
D)all of the above
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| show | -encourage technological progress
-remove unnecessary government regulations
-give investment tax credits to stimulate specific capital investments
D)all of the above
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| show | a large shift in the AD-curve but a small shift in the AS-curve
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| show | the fact that the long-run AS-curve shifts to the right over time
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| show | the level of output is essentially determined by shifts in the AS-curve
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| As nominal money supply is steadily increased and the long-run AS-curve shifts to the right over time, we realize that | show 🗑
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