ECN 211 Final Exam Review Questions With
Correct Answers
Real |GDP |is |commonly |used |for |what? |- |CORRECT |ANSWER✔✔-Short |run |changes.
When |real |GDP |falls, |so |does |what? |- |CORRECT |ANSWER✔✔-- |Personal |income
- |Corporate |profits
- |Consumer |spending
- |Investment |spending
- |Industrial |production
When |the |overall |economy |declines |that |is |due |to |what? |- |CORRECT |ANSWER✔✔-- |Reduction |
in |spending |in |factories
- |Housing
- |Inventory
When |real |GDP |declines, |what |happens |to |the |unemployment |rate? |- |CORRECT |ANSWER✔✔-
It |increases.
What |is |the |natural |rate |of |unemployment? |- |CORRECT |ANSWER✔✔-5% |or |6%.
In |the |short |run, |what |can |money |supply |do? |- |CORRECT |ANSWER✔✔-It |can |temporarily |push
|real |GDP |away |from |the |long |run.
Model |of |aggregate |demand/supply |- |CORRECT |ANSWER✔✔-Explains |the |short-run |
fluctuations |around |its |long-run |trend.
, Aggregate |demand |- |CORRECT |ANSWER✔✔-The |curve |that |shows |the |quantity |of |goods |and |
services |households, |firms, |government, |and |customers |from |abroad |want |to |buy |at |each |
price |level.
Aggregate |supply |- |CORRECT |ANSWER✔✔-The |curve |that |shows |the |quantity |of |goods |and |
services |firms |choose |to |produce |or |sell |at |each |price |level.
When |there's |a |lower |interest |rate, |what |affect |does |that |have |on |the |quantity |demanded? |- |
CORRECT |ANSWER✔✔-It |increases.
When |the |price |level |decreases, |what |affect |does |that |have |on |the |interest |rate, |spending, |
and |quantity? |- |CORRECT |ANSWER✔✔-- |Interest |rate |decreases
- |Spending |increases
- |Quantity |increases
As |the |real |exchange |dollar |value |decreases... |- |CORRECT |ANSWER✔✔-Quantity |demanded |
increases.
When |consumption |(C), |investment |(I), |government |purchases |(G), |and |net |exports |(NX) |
increases, |how |does |the |aggregate |demand |curve |shift? |- |CORRECT |ANSWER✔✔-It |shifts |to |
the |right.
When |the |government |cut |taxes, |how |does |the |aggregate |demand |curve |shift? |- |CORRECT |
ANSWER✔✔-It |shifts |to |the |right.
When |there |is |an |increase |in |money |supply |how |does |the |aggregate |demand |curve |shift? |- |
CORRECT |ANSWER✔✔-It |shits |to |the |right.
Correct Answers
Real |GDP |is |commonly |used |for |what? |- |CORRECT |ANSWER✔✔-Short |run |changes.
When |real |GDP |falls, |so |does |what? |- |CORRECT |ANSWER✔✔-- |Personal |income
- |Corporate |profits
- |Consumer |spending
- |Investment |spending
- |Industrial |production
When |the |overall |economy |declines |that |is |due |to |what? |- |CORRECT |ANSWER✔✔-- |Reduction |
in |spending |in |factories
- |Housing
- |Inventory
When |real |GDP |declines, |what |happens |to |the |unemployment |rate? |- |CORRECT |ANSWER✔✔-
It |increases.
What |is |the |natural |rate |of |unemployment? |- |CORRECT |ANSWER✔✔-5% |or |6%.
In |the |short |run, |what |can |money |supply |do? |- |CORRECT |ANSWER✔✔-It |can |temporarily |push
|real |GDP |away |from |the |long |run.
Model |of |aggregate |demand/supply |- |CORRECT |ANSWER✔✔-Explains |the |short-run |
fluctuations |around |its |long-run |trend.
, Aggregate |demand |- |CORRECT |ANSWER✔✔-The |curve |that |shows |the |quantity |of |goods |and |
services |households, |firms, |government, |and |customers |from |abroad |want |to |buy |at |each |
price |level.
Aggregate |supply |- |CORRECT |ANSWER✔✔-The |curve |that |shows |the |quantity |of |goods |and |
services |firms |choose |to |produce |or |sell |at |each |price |level.
When |there's |a |lower |interest |rate, |what |affect |does |that |have |on |the |quantity |demanded? |- |
CORRECT |ANSWER✔✔-It |increases.
When |the |price |level |decreases, |what |affect |does |that |have |on |the |interest |rate, |spending, |
and |quantity? |- |CORRECT |ANSWER✔✔-- |Interest |rate |decreases
- |Spending |increases
- |Quantity |increases
As |the |real |exchange |dollar |value |decreases... |- |CORRECT |ANSWER✔✔-Quantity |demanded |
increases.
When |consumption |(C), |investment |(I), |government |purchases |(G), |and |net |exports |(NX) |
increases, |how |does |the |aggregate |demand |curve |shift? |- |CORRECT |ANSWER✔✔-It |shifts |to |
the |right.
When |the |government |cut |taxes, |how |does |the |aggregate |demand |curve |shift? |- |CORRECT |
ANSWER✔✔-It |shifts |to |the |right.
When |there |is |an |increase |in |money |supply |how |does |the |aggregate |demand |curve |shift? |- |
CORRECT |ANSWER✔✔-It |shits |to |the |right.
