ECON 110 Read & Interact Schiller & Gephardt Chapter 11 solutions complete answers

ECON 110 Read & Interact Schiller & Gephardt Chapter 11 solutions complete answers 

 

The United States had a more eclectic policy focus in the:

 

Many of President Trump's policy preferences (deregulation and tax cuts to encourage production) can be considered ______ economic policies.

 

The _____ saw a return to a more "hands-off" economic policy.

 

Supply-side economics became important in the:

 

The use of tax rates on wages and profits, (de)regulation, and mechanisms such as educating the workforce, to increase the ability and willingness to produce goods and services, is which type of policy?

 

Keynes argued that a(n) _________ in aggregate spending tends to depress the economy.

 

Keynes argued that a recession might result from which of the following?

 

_____ theory, which encourages government spending or tax cuts to stimulate the economy, is the most prominent of the demand-side theories.

 

A tax increase will reduce consumption and shift the aggregate curve to the   (right/left).

 

A natural disaster such as a hurricane that significantly interrupts firms' ability to provide goods and services to the economy at any price will likely cause:

 

When the price level is _______ macro equilibrium, surpluses will emerge and sellers will _______.

 

If consumers are nervous about future prices and stability, the aggregate ________ curve will shift to the _______.

 

Given aggregate demand, if the aggregate supply curve shifts to the left, then the price level will _______ and output will _______.

 

An increase in the average level of prices of goods and services is  .

 

When the price level is _______ macro equilibrium, shortages will emerge and sellers will _______.

 

When the macro equilibrium GDP is less than full-employment GDP, the resulting unemployment is:

 

If labor force participants are unable to find jobs, the economy is experiencing

 

The idea that even if the designated macro equilibrium is optimal, it may not last long is the problem of _______. The idea that equilibrium price or output level may not satisfy our macroeconomic goals is the problem of _______.

 

When the price level is below macro equilibrium, _______ will emerge and sellers will _______.

 

 unemployment occurs when equilibrium GDP is less than full-employment GDP.

 

_______ is the unique combination of price level and real output that is compatible with both aggregate demand and aggregate supply.

 

The equilibrium price level and equilibrium output are determined by the intersection of the aggregate demand curve and the aggregate   curve.

 

When the price level is above macro equilibrium, _______ will emerge and sellers will _______.

 

When price levels fall, the quantity of real output demanded will _______.

 

If the price level is higher than the equilibrium price level, then the aggregate quantity supplied will be _____ the aggregate quantity demanded.

 

The interest rate effect occurs when a higher price level       (increases/decreases) the demand for borrowing and increases the interest rate, assuming a fixed money supply.

 

When price levels rise, the quantity of real output demanded will _______.

 

The foreign trade effect occurs when the U.S. price level   (increases/decreases) relative to foreign price levels and the quantity of U.S. goods demanded as net exports decreases.

 

Which statement defines the real balances effect?

 

When a higher price level increases the demand for consumer borrowing, which will drive up the price paid for its use, assuming a fixed money supply, which effect is at work?

 

The downward-sloping aggregate demand curve indicates ______ relationship between the price level and real output.

 

According to ______ , a higher price level reduces the purchasing power of the public's accumulated savings balances.

 

An important controversy between classical and Keynesian economists is whether market economies are inherently  .

 

Keynesian economists believe which of the following?

 

A schedule or curve that shows the total quantity of output (real GDP) demanded at alternative price levels in a given time period, ceteris paribus, is called:

 

The cornerstones of classical economics are which of the following?

 

An important controversy between classical and Keynesian economists is:

 

Because of the classical economists' belief that the economy self-adjusts, they assert that

 

Because of the classical economists' belief that the economy self-adjusts, they assert that government intervention

 

Which of the following is NOT an internal market force?

 

The cornerstones of the classical theory are flexible:

 

The economists who view economic downturns as temporary setbacks, not permanent problems, are the

 

Output, growth, and jobs are among the _______ that define our nation’s economic welfare.

 

The study of aggregate economic behavior is

 

Which of the following are not basic macro outcomes?

 

Output, growth, jobs are among the _______ that define our nation’s economic welfare.

 

The three basic determinants of the macro economy include:

 

Wars and natural disasters are referred to as       shocks.

 

The study of the economy as a whole is

 

The economists that view economic downturns as temporary setbacks, not permanent problems, are the

 

Three of the basic macro outcomes include

 

_______ define our nation’s economic welfare.

 

According to       economists, the economy self-adjusts to deviations from its long-term growth trend.

 

Which of the following is not considered to be a determinant of macro performance:

 

The cornerstones of classical economics are which of the following

 

Which of the following are identified as policy levers?

 

Because of the Classical economists belief that the economy self-adjusts, they assert that government intervention

 

According to classical economics, the economy is inherently _______ due to flexible wages and flexible prices.

 

During the Great Depression, the       self-adjustment mechanism simply did not work.

 

Inherent market instability is most closely connected to which economic theory?

 

According to what theory does the economy "self-adjust"?

 

An important controversy between Classical and Keynesian economists is if market economies are inherently      .

 

The cornerstone of the Classical Theory is flexible:

 

According to Keynesian economic theory, the economy is inherently _______ and therefore requires _______.

 

Because of the Classical economists belief that the economy self-adjusts, they assert that

 

Aggregate       is a schedule or curve that shows the total quantity of output (real GDP) demanded at alternative price levels in a given time period, ceteris paribus.

 

True or false: The Great Depression was a stunning blow to Classical Theory.

 

The aggregate demand curve slopes downward because it reflects:

 

The idea that small disturbances in output, prices, or unemployment are likely to be magnified, not muted, by the invisible hand of the marketplace is describing

 

The real balances effect can be defined as:

 

Match the following:

 

As a result of the foreign trade effect, an increase in domestic price levels will       net exports.

 

Keynesian economists believe which of the following;

 

A schedule or curve that shows the total quantity of output (real GDP) demanded at alternative price levels in a given time period, ceteris paribus is called:

 

When interest rates are higher, businesses and consumers will

 

A downward-sloping aggregate demand curve indicates an inverse relationship between:

 

Which of the following effects help explain why the aggregate demand curve is downward sloping?

 

The ______ is when a higher price level reduces the purchasing power of the public's accumulated savings balances.

 

When price levels fall, the quantity of real output demanded will      .

 

The foreign trade effect is when the US price level       (increases/decrreases) relative to foreign price levels and the quantity of US goods demanded as net exports decreases.

 

Which of the following explain the reason for the upward slope of the aggregate supply curve?

 

Keynes believed that because the market was unstable, intervention by       was necessary.

 

Aggregate _______ can be represented as a schedule or curve showing the relationship between the price level and the amount of real output that is produced in a given time period.

 

When a higher price level increases the demand for consumer borrowing, which will drive up the price paid for its use, assuming a fixed money supply, it is called the:

 

Along the aggregate supply curve, output increases when the price level      .

 

Which of the following effects does not help explain why the aggregate demand curve is downward sloping?

 

The combination of price level and real output where aggregate demand _______ aggregate supply is known as macro equilibrium.

 

When the price level rises, the quantity of real output demanded will       (increase/decrease).

 

Which of the following explains the reason for the upward-sloping aggregate supply curve in the short run?

 

Macro equilibrium is the unique combination of price level and real output that is compatible with both _______ and _______.

 

If the aggregate quantity supplied is greater than the aggregate quantity demanded, the current price level is _______ the equilibrium price level. 

 

The aggregate supply curve has what general shape?

 

When the price level is below macro equilibrium _______ would emerge and sellers would _______.

 

The macro equilibrium occurs where:

 

The equilibrium price level and equilibrium output is determined by the intersection of the aggregate demand curve and the aggregate       curve.

 

The potential problems with macro equilibrium are:

 

The combination of price level and real output where aggregate demand equals aggregate supply is known as:

 

_______ refers to the quantity of output that could be produced if the labor force were fully employed.

 

If the price level was lower than the equilibrium price level, then aggregate quantity supplied is _______ aggregate quantity demanded.

 

      unemployment occurs when equilibrium GDP is less than full employment GDP.

 

When the price level is _______ macro equilibrium shortages would emerge and sellers would _______.

 

The intersection of the aggregate demand and the aggregate supply curves determines

 

The inability of labor force participants to find jobs

 

The idea that even if the designated macro equilibrium is optimal, it may not last long is the problem of _______. The equilibrium price or output level may not satisfy our macroeconomic goals is the problem of _______.

 

An increase in the average level of prices of goods and services is

 

The value of total output produced if the labor force were fully employed is called       employment GDP.

 

When the macro equilibrium GDP is less than full employment GDP the resulting unemployment is:

 

The macro failure of unstable outcomes means that

 

If labor force participants are unable to find jobs, we call this

 

All else equal, a decrease in aggregate demand, assuming constant aggregate supply, will cause a(n) _______ in the price level and a(n) _______ in real output.

 

Given aggregate demand, if the aggregate supply curve shifts to the left, the price level will _______ and output will _______.

 

True or false: Macro equilibrium and full-employment GDP are always equal.

 

True or false: business cycles are likely to result from recurrent shifts of the aggregate supply and demand curves.

 

Changes in which of the following can shift the aggregate demand curve?

 

Unstable outcomes mean that

 

If consumers are optimistic about future prices and stability, the aggregate ________ curve will shift to the _______.

 

Assuming aggregate supply remains unchanged, a decrease in aggregate demand will result in a       (increase/decrease) in real GDP.

 

Which of the following are determinants of aggregate supply?

 

The result of a natural disaster such as a hurricane that significantly interrupts the ability of firms to provide goods and services to the economy at any price will likely cause:

 

The determinants of aggregate supply (such as natural disasters, changes in tax policy, etc.) are variables that:

 

Business cycles are likely to result from recurrent       of the aggregate supply and demand curves.

 

Aggregate supply and demand curves provide a convenient framework for comparing theories on how the economy works. Macro controversies focus on the _______ of aggregate supply and demand curves and the potential to _______.

 

Changes in consumer confidence, wealth, or taxes will:

 

Keynesian theory is categorized as a _______ theory.

 

A tax cut will shift the aggregate demand curve to the      .

 

An increase in the price of oil due to a conflict will ______ per-unit production costs and shift the aggregate supply curve to the ______.

 

Keynes argued that a(n) _________ in aggregate spending would tend to depress the economy.

 

An increase in producer taxes will cause the aggregate supply curve to _______.

 

Aggregate supply and demand curves provide a convenient framework for comparing theories on how the economy works. Macro controversies focus on the shape of _______ and the potential to shift them.

 

_____ theory, where government spending or tax cuts are used to stimulate the economy, is the most prominent of the demand-side theories.

 

Monetary theory is categorized as a(n) _____ theory.

 

When a failure to achieve full employment results from the unwillingness of producers to provide more goods at existing prices _______ economic theories are often implemented.

 

Keynes argued that a recession might result from which of the following:

 

Which is not one of the three government policy options to combat business cycles?

 

A natural disaster causing higher essential input prices would cause

 

Fiscal policy is the use of _______ to alter macroeconomic outcomes.

 

Monetary policy refers to the use of _______ to influence macroeconomic activity.

 

_____ is the demand-side theory that emphasizes the need for money and credit for financing spending.

 

The use of tax rates on wages and profits, (de)regulation, and mechanisms such as educating the workforce, to increase the ability and willingness to produce goods and services is referred to as

 

The mechanisms for shifting the aggregate supply curve in the desired direction are the focus of

 

Fiscal policy dominated economic debate in the:

 

Which are the three government policy options to combat business cycles?

 

Which type of policy prevailed during the 1970s?

 

The use of government taxes and spending to alter macroeconomic outcomes is known as

 

Supply side economics became important in the:

 

_______ refers to the use of money and interest rates to alter macroeconomic outcomes.

 

The _____ saw a return to a more "hands off" economic policy.

 

Supply-side policy is the use of _______ in order to increase the ability and willingness to produce goods and services.

 

Which type of policy prevailed during the 1960s?

 

Which type of policy prevailed during the 2000s?

 

Monetary policy was in the limelight in the:

 

President Obama's term in office featured the return of _________ as the main economic focus.

 

Which type of policy prevailed during the 1980s?

 

Much of President Trump's policy preferences (deregulation and tax cut to encourage production) can be considered ______ economic policies.

 

Which type of policy prevailed in the United States during the early 1990s?

 

The United States had a more "eclectic policy" focus in the:

 

Which type of policy prevailed during President Obama's term in office?

 

President Trump's 2017 tax cut was primarily designed to:

 

 

The three determinants of macro performance include internal market forces, external shocks, and

 

Which of the following would be considered an external shock?

 

True or false: The Classical Theorists believe that the economy is inherently stable.

 

The cornerstones of classical economics are flexible _______ and flexible _________.

 

The aggregate demand curve slopes downward because the relationship between the price level and real output is:

 

When the US price level rises relative to foreign price levels, US exports will ____ and US imports will _____.

 

The interest-rate effect is when a higher price level ________ the demand for borrowing and increases the interest rate, assuming a fixed money supply.

 

An increase in asset values that results in an increase in consumer spending is called the real ______ effect.

 

Businesses and consumers will _______ their demand for loans when interest rates are higher.

 

When price levels rise, the quantity of real output demanded will

 

_________ _________ is the total quantity of output producers are willing and able to supply at alternative prices levels in a given time period, ceteris paribus.

 

The idea that some costs of production rise when output is increased helps explain why the

 

If the aggregate quantity supplied is less than the aggregate quantity demanded, the current price level is ______ ______ the equilibrium price level

 

If the price level is higher than the equilibrium price level, the aggregate quantity supplied will be _________ _________ the aggregate quantity demanded.

 

The value of total output produced at full employment is called:

 

The macro equilibrium in the economy

 

A demand-side theory that emphasizes the role of money in financing aggregate demand is known as:

 

Supply-Side Policy happened in the

 

The classical view of the economy is characterized by

 

Which of the following is necessary for an economy to self-adjust fairly quickly, according to classical economists?

 

Say’s Law states that

 

According to Keynes,

 

The various quantities of output that all market participants are willing and able to buy at alternative price levels in a given time period is

 

According to the real balances effect, when the price level

 

When the U.S. price level increases relative to the price level in foreign economies, U.S. consumers tend to buy

 

The aggregate demand curve is downward-sloping because, other things being equal

 

The short-run aggregate supply curve is

 

The intersection of the aggregate demand and supply curves establishes

 

Which of the following is likely to cause a leftward shift in the aggregate supply curve, ceteris paribus?

 

Ceteris paribus, a rightward shift of the aggregate supply curve will cause the equilibrium price level to _______ and equilibrium real output to _______.

 

Which of the following is likely to occur if people reduce their spending because they are worried about an economic downturn, ceteris paribus?

 

If an economy is experiencing a recession, the Keynesian approach to achieving full employment is to

 

According to Keynes, which of the following should occur because of a decrease in government expenditure, ceteris paribus?

 

Which of the following is a mechanism Keynes advocated for dealing with a situation of depressed output?

 

According to monetary theories, an increase in the money supply shifts the aggregate

 

If an economy is experiencing a recession, the classical approach to achieving full employment is to

 

Which of the following stresses the inability of the government to improve short-run market outcomes?

 

The value of output measured in constant prices is known as:

 

The school of economic thought that views economic downturn as temporary setbacks, not permanent problems are the

 

Identify the 5 basic macroeconomic outcomes

 

The law which states that “supply creates its own demand” is referred to as

 

If the macro equilibrium is lower than the full employment output, then the macro problem is

 

If the macro equilibrium is greater than the full employment output then the macro problem is

 

Aggregate supply is represented as a schedule or curve showing the relationship between the ______ level and the amount output produced in the economy.

 

Say’s Law refers to which of the following: 

 

The determinants of macro performance include:

 

Which of the following explain the reason for the upward sloping aggregate supply curve?

 

The value of total output produced at full employment is called _______ employment GDP

 

The downward sloping aggregate demand curve indicates that there is a _____ relationship between the price level and real output

 

One of the main debates between the classical economists and Keynesian economists was related to ______.

 

When the price level is lower than macro equilibrium?

 

Which of the following are demand-side theories?

 

According to classical economics, the economy _______ to deviations from its long-term growth trend

 

The most prominent of the demand-side theories is ________ theory, where government spending or tax cuts are urged to stimulate the economy

 

A tax increase will reduce consumption and shift the aggregate curve to the

 

Which type of policy prevailed during president Obama’s first term in office

 

In the short run, which of the following shifts could cause a decrease in real output?

 

A decrease in aggregate demand with an unchanging aggregate supply results in:

 

The inflation-adjusted value of GDP is known as:

 

The study of aggregate economic behavior is referred to as:

 

When the price level is above macro equilibrium _______ would emerge and sellers would _______.

 

Unstable outcomes means that

 

Given aggregate supply, if the aggregate demand curve shifts to the left, prices will _______ and output will _______.

 

The interest-rate effect is when a higher price level __________________ (increases/decreases) the demand for borrowing and increases the interest rate, assuming a fixed money supply.

 

The combination of prices and real output that is compatible with both aggregate demand and aggregate supply is called the

 

An increase asset values that results is an increase in consumer spending is called the real ____________ effect.

 

Which of the following effects help expelling why the aggregate demand curve is downward sloping:

 

The combination of price level and real output that is compatible with both aggregate demand and aggregate supply is called the

 

According to Keynesian economic theory, the economic is inherently _______ and therefore requires ________.

 

The concept that “supply creates its own demand” is known as ___________.

 

According to classical economics the economy is inherently _________ due to flexible wages and flexible prices.

 

If aggregate quantity supplied is greater than aggregate quantity demanded the current price level is __________ the equilibrium price level.