ECO 201 Chapter 13 Exam Questions and Answers Already Passed
A typical Keynesian aggregate supply (AS) curve _______________ and a typical Keynesian Phillips curve
_____________. - Answers slopes upward; slopes downward
From a neoclassical view, which of the following is a true statement? - Answers The economy cannot
sustain production above its potential GDP in the long run.
In the neoclassical model, the AS curve shifts to the right over time as_______________________ and
potential GDP expands. - Answers productivity increases
The neoclassical view holds that long-term expansion of potential GDP due to
_______________________ will determine ____________________. - Answers economic growth; the
size of the economy
From a neoclassical view, which of the following is less important? - Answers fighting unemployment
Suppose that productivity growth in an economy over a two-year period has fallen to less than 2% per
year, causing a severe recession. From the neoclassical view, which of the following will be more
important in these circumstances? - Answers the growth rate of long-term productivity
The theory of _____________________ holds that people will use all information available to them to
form the most accurate possible expectations about the future. - Answers rational expectations
Which of the following represents a Keynesian point of view of macroeconomics? - Answers creating
increases in aggregate demand to reduce unemployment
In the neoclassical view, changes in ____________________ can only have a short-run impact on output
and on unemployment. - Answers aggregate demand
Which of the following is a distinguishing characteristic of the neoclassical view? - Answers flexibility of
wages and prices over time
If the neoclassical argument that the economy always moves back to potential GDP is accepted, then
which of the following will be more important? - Answers encouraging long-term growth
At a macroeconomic level, the theory of rational expectations points out that if the
______________________ is vertical over time, then people should rationally expect this pattern. -
Answers aggregate supply curve
Suppose that a rise in business confidence has led to more investment in the economy and higher levels
of output. In the short-run Keynesian analysis, the rise in aggregate demand will: - Answers lower
unemployment.
Over the long run, a surge in aggregate demand from a neoclassical perspective will most likely result in:
- Answers an increase in price level.
A typical Keynesian aggregate supply (AS) curve _______________ and a typical Keynesian Phillips curve
_____________. - Answers slopes upward; slopes downward
From a neoclassical view, which of the following is a true statement? - Answers The economy cannot
sustain production above its potential GDP in the long run.
In the neoclassical model, the AS curve shifts to the right over time as_______________________ and
potential GDP expands. - Answers productivity increases
The neoclassical view holds that long-term expansion of potential GDP due to
_______________________ will determine ____________________. - Answers economic growth; the
size of the economy
From a neoclassical view, which of the following is less important? - Answers fighting unemployment
Suppose that productivity growth in an economy over a two-year period has fallen to less than 2% per
year, causing a severe recession. From the neoclassical view, which of the following will be more
important in these circumstances? - Answers the growth rate of long-term productivity
The theory of _____________________ holds that people will use all information available to them to
form the most accurate possible expectations about the future. - Answers rational expectations
Which of the following represents a Keynesian point of view of macroeconomics? - Answers creating
increases in aggregate demand to reduce unemployment
In the neoclassical view, changes in ____________________ can only have a short-run impact on output
and on unemployment. - Answers aggregate demand
Which of the following is a distinguishing characteristic of the neoclassical view? - Answers flexibility of
wages and prices over time
If the neoclassical argument that the economy always moves back to potential GDP is accepted, then
which of the following will be more important? - Answers encouraging long-term growth
At a macroeconomic level, the theory of rational expectations points out that if the
______________________ is vertical over time, then people should rationally expect this pattern. -
Answers aggregate supply curve
Suppose that a rise in business confidence has led to more investment in the economy and higher levels
of output. In the short-run Keynesian analysis, the rise in aggregate demand will: - Answers lower
unemployment.
Over the long run, a surge in aggregate demand from a neoclassical perspective will most likely result in:
- Answers an increase in price level.
