Posted: January 2nd, 2017

The equilibrium quantity of labor and the equilibrium wage level decrease when: a) labor demand shifts to the left, if wages are flexible.

Question 1 1 / 1 point _______________________ happens when the economy is producing at its potential and unemployment is at the natural rate of unemployment. a) Stagflation b) The interest rate effect c) The foreign price effect d) Full employment GDP Question 2 1 / 1 point Melanie decided to save 20% of her annual earnings for 10 years so she would have a down payment for a house. After 5 years, what change in the economy would cause an increase in the purchasing power of the funds she has managed to save? a) stagflation b) depression c) deflation d) recession Question 3 1 / 1 point If the price level of what firms produce is rising across an economy, but the costs of production are constant, then: a) higher profits will induce expanded production. b) a majority of industries will start running into limits. c) increase in quantity produced won’t be large. d) the maximum potential GDP will be exceeded. Question 4 1 / 1 point What term is used to describe the maximum quantity that an economy can produce, in the context of its existing inputs, market and legal institutions? a) aggregate supply b) potential GDP c) GDP deflator d) AS curve Chapter 11 Problems Question 5 1 / 1 point The graph above refers to a significant increase in individual income taxes, taking them to their highest level in 50 years. Which of the following is likely to result? a) macroeconomic supply will decrease in the short run b) the economy will experience lower economic growth c) inflationary pressures will be mild d) cyclical unemployment will decrease Chapter 12 Random Question 6 1 / 1 point If a Phillip curve shows that unemployment is low and inflation is high in the economy, then that economy: a) is producing at its equilibrium point. b) is producing at its potential GDP. c) is producing at a point where output is more than potential GDP. d) is producing at a point where output is less than potential GDP. Question 7 1 / 1 point The equilibrium quantity of labor and the equilibrium wage level decrease when: a) labor demand shifts to the left, if wages are flexible. b) labor supply shifts to the left, if wages are flexible. c) labor supply shifts to the right, if wages are flexible. d) labor demand shifts to the right, if wages are flexible. Question 8 1 / 1 point According to macroeconomic theory, evidence that high unemployment may be accompanied by low inflation, and low unemployment may be accompanied by high inflation is supported by the: a) Keynesian cross diagram. b) Keynesian Inflation trade-off model. c) Keynesian Phillips curve tradeoff. d) neoclassical expenditure-output model. Chapter 12 Problems Multiplier Question 9 1 / 1 point The economy is in a recession and the government wants to increase output. If the multiplier equals 3 and the government increases spending by 250, how much will output increase by? a) 100 b) 200 c) 750 d) 50 Chapter 12 and 13 Graph problems Question 10 0 / 1 point Referring to the diagram, which of the following is a true statement? a) The increase in output (Q1 to Q2) may come about because of lower levels of taxation. b) The increase in supply (Q1 to Q2) may come about because of increased money supply. c) The increase in supply (Q1 to Q2) may result from decreased government spending. d) The increase in output (Q1 to Q2) may result from increased levels of taxation.