eco 372 week 2 knowledge check
1.
The globalized AS/AD curve is the standard AS/AD model with an added
• A.
world demand curve
• B.
domestic supply curve
• C.
world supply curve
• D.
long-run aggregate supply curve
2.
According to Say’s Law, people
• A.
supply goods in order to obtain other goods
• B.
supply goods in order to accumulate profits
• C.
demand goods in order to maximize their wealth
• D.
demand goods so they can supply them to others
3.
A shift in the long-run aggregate supply curve will change
• A.
output but not the price level
• B.
the price level but not the output
• C.
both output and the price level
• D.
neither output nor the price level
4.
The hypothesis about the macroeconomy that sees the recent problems with the U.S. economy directly related to the structural problems caused by globalization is referred to as the __________ hypothesis.
• A.
low investment
• B.
secular stagnation
• C.
structural stagnation
• D.
comparative stagnation
5.
In 2009, the personal savings rate rose. If the additional savings were not translated into investment, Keynes would predict that aggregate income would
• A.
decline and remain there
• B.
rise indefinitely
• C.
decline but rise in the future
• D.
would rise and remain there
6.
According to the Keynesian model,
• A.
wages are flexible because workers wouldn’t otherwise be able to keep their jobs
• B.
the price level is fixed due to social forces, which keeps the economy from remaining at an equilibrium level of unemployment
• C.
prices are subject to significant fluctuations as demand and supply change
• D.
the government puts price controls on the economy, keeping the price level fixed
7.
The study of economic growth focuses on the factors that cause an
• A.
economy to move along its production possibility curve
• B.
economy’s production possibility curve to shift out
• C.
economy to move from a point inside its product possibility curve to a point on this curve
• D.
economy to move from a point on its production possibility curve to a point outside this curve
8.
The central difference between the standard theory and the structural stagnation hypothesis when it comes to growth is
• A.
the level of inflation
• B.
the trend growth rate
• C.
the federal funds rate
• D.
the natural rate of unemployment