Macroeconomics Quiz

Question 6 of 40

2.5 Points

If home prices are falling, consumers purchasing a home will find their purchasing power of money has increased. This benefit to consumers is called the __________.

A. inflation effect
B. wealth effect
C. home equity effect
D. multiplier effect

Question 13 of 40

2.5 Points

Adjustments in __________ take the economy from the short-run equilibrium to the long-run equilibrium.

A. imports and exports
B. interest rates
C. wages and prices
D. the multiplier

Question 16 of 40

2.5 Points

What represents the relationship between the quantity of real GDP supplied and the price level when all other influences on production plans remain the same?

A. aggregate demand
B. aggregate supply
C. the money wage rate
D. the money price index

Question 18 of 40

2.5 Points

When the U.S. price level rises and other things remain the same, the prices in other countries __________.

A. rise
B. fall
C. do not change
D. will rise or fall depending on demand
Question 23 of 40	2.5 Points

Classical economics refers to a body of work initially developed by __________.

A. Keynes
B. Malthus
C. Say
D. Smith

Question 29 of 40

2.5 Points

What is the proposition that when the inflation rate changes, the unemployment rate changes temporarily and then turns to the natural unemployment rate?

A. the trade-off theory
B. the natural rate hypothesis
C. Okun’s law
D. Phillip’s monetary policy

Question 31 of 40

2.5 Points

In the short run, increases in the money supply increase the level of output because __________.

A. prices and wages are sticky
B. prices and wages are flexible
C. interest rates are sticky
D. demand is fixed

Question 35 of 40

2.5 Points

The trade-off between inflation and unemployment occurs when a lower unemployment rate brings a __________.

A. lower inflation rate
B. higher inflation rate
C. lower aggregate supply
D. higher aggregate supply

Question 37 of 40

2.5 Points

What policy action by the Fed describes when people believe that the Fed will lower the inflation rate, and the expected inflation rate falls in order to slow the inflation rate without any accompanying loss of output or increase in unemployment?

A. rational reduction
B. surprise inflation reduction
C. credible announced inflation reduction
D. statistical model of reduction

Question 38 of 40

2.5 Points

At full employment, the unemployment rate equals the __________.

A. equilibrium expenditure
B. consumer price level
C. natural unemployment rate
D. inflation rate