ASU ECN 211 Exam 3 2024 with 100% correct answers

Recession - correct answer -a period of mildly falling incomes and rising unemployment ex. -caused by a leftward shift in aggregate demand and a leftward shift in aggregate supply Depression - correct answer a severe period of falling incomes and rising unemployment ex. Great Depression The Business Cycle - correct answer the short-run fluctuations of the economy Economic Fluctuations - correct answer -are irregular and unpredictable -most macroeconomic variables measuring income, spending, or production move in the same direction When Output Falls, Unemployment Rises - correct answer when real GDP declines the rate of unemployment rises because when firms produce fewer goods and services, they lay off workers Classical Dichotomy - correct answer -the separation of economic variables into real and nominal -monetary neutrality is the property that changes money supply and only affects nominal variables, not real variables -used for long-run description of the economy Monetary Neutrality - correct answer *if the money supply doubles -prices, wages and all dollar values double -real output, employment, real interest rates, and real wages remain unchanged -money is unlikely to be neutral in the short run, but it is likely to be neutral in the long run Nominal Variables - correct answer -those variables measured in monetary units -effected by changes in th emoney supply Real Variables - correct answer those variables measured in physical units