Module 7 Quiz

A  consumption

B  government spending

C  import spending

A  C + I + G + gross exports.

B  C + I + G + (X-M).

C  C + I + G + import spending.

A  flattens

B  steepens

C  does not affect

A  people always make a basic income no matter what

B  people still have basics needs they must meet

C  people would get things on sale

A  real savings

B  real spending

C  real interest rates

A  The budget process is what is used by the federal, state and local governments determine the level of government spending

B  There is fluctuation in government spending.

C  On a Keynesian cross diagram the government spending appears as a horizontal line.

A  The investment function on a graph is drawn as a horizontal line.

B  The investment function has a slope of one.

C  There is a relationship between the investment function and the GDP.

A  The graph would include the consumption function (after taxes), the investment function, the government spending function, and the net export function.

B  The graph would include the consumption function (after taxes) the government spending function, and the net export function.

C  The graph would include the consumption function (after taxes), the investment function, and the government spending function.

A  income-expenditure model

B  consumption function

C  spending model

A  play a role; there is inflation and unemployment

B  not play a role; actions by consumers, firms, and trading partners fall short of expectations

C  play a role; the aggregate demand has a significant gap with the aggregate supply

A  should; when the aggregate demand does not match the aggregate supply

B  should not; especially when actions by consumers, firms, and trading partners fall short of expectations

C  should not; when there is unemployment and inflation

A  The Keynesian Phillips curve tradeoff.

B  A neoclassical aggregate demand-aggregate supply model.

C  A Keynesian cross diagram.

A  shift to the right

B  remain the same.

C  shift to the left

A  The AD curve would shift to the right.

B  The AD curve would remain unchanged.

C  The AD curve would shift to the left.

A  Businesses operate at full employment when aggregate demand is high enough to motivate them to hire more labor.

B  Over the long-term, the aggregate supply curve shifts.

C  The larger macroeconomy tends to adjust slowly to shifts in aggregate demand because of sticky prices.

A  past profits

B  interest rates

C  their wealth

A  all complementary elements of a market economy

B  all components of aggregate demand.

C  some of the opposing elements found in a market economy.

A  increase in home purchases, as expected future incomes increased

B  decrease in consumption expenditure, as household wealth declined.

C  decrease in government spending to match declining tax revenues

A  It is aggregate supply that is the primary determinant of economic output..

B  Prices are sticky.

C  Macroeconomics must focus on growth in the long-term.