ECON 214 quiz 7 solutions complete answers

ECON 214 quiz 7 solutions complete answers 

 

The Great Recession was similar to most other recessions since World War II in that:

 

Prior to the Great Depression, U.S. stock prices decreased dramatically. This would tend to cause:

 

During the Great Depression, the U.S. aggregate demand curve shifted to the left, in part, because:

 

Which of the following economic statements would a Keynesian economist tend to support?

 

During the Great Recession, aggregate demand ________ and long-run aggregate supply ________.

 

 

 One similarity between the Great Recession and the Great Depression is that, in both episodes:

           

Which of the following best summarizes the main causes of the Great Recession?

           

The Great Recession began in:

           

During the Great Recession, the unemployment rate climbed as high as _________ and remained around 8% _________ months after the recession began.

           

 The Great Recession ended in:

           

The Great Recession lasted for:

           

The Great Recession lasted from _________ to _________.

           

The Great Recession began in __________ and lasted for __________.

           

The Great Recession was similar to other recessions since World War II in that:

           

The Great Recession was similar to other recessions since World War II in that:

           

The Great Recession was different from other recessions since World War II in that:

           

The Great Recession was different from other recessions since World War II in that:

           

The Great Recession was different from other recessions since World War II in that:

           

The Great Recession lasted longer and was deeper than the average recession, in part, because:

           

During the Great Recession, a major financial crisis followed the collapse of housing prices, which led to:

           

During the Great Recession, there was a financial crisis, a stock market crash, and a collapse in housing prices, all of which:

           

Use the following graph to answer the next seven questions. The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased, with no change in short-run aggregate supply (SRAS).

 

      

As a result of aggregate demand and long-run aggregate supply decreasing, we can see that the price level _________ and real gross domestic product (GDP) _________.

           

 The graph accurately summarizes what happened during the Great Recession, because during that time, the price level _________ and real gross domestic product (GDP) _________.

           

Which of the following would have caused aggregate demand to decrease in the graph, such as occurred during the Great Recession?

           

During the Great Recession, real gross domestic product (GDP) decreased yet the aggregate price level remained largely unchanged, as depicted in the graph. Unemployment increased to above-normal levels. Which of following best explains why this happened?

           

During the Great Recession, real gross domestic product (GDP) fell yet the price level was largely unchanged, as depicted in the graph. Because of this, we know that:

           

The decline in housing prices contributed to the Great Recession, as depicted in the graph, in that:

           

In the graph, we see that long-run aggregate supply decreased during the Great Recession. This was due to a decline in housing prices and the subsequent financial crisis. Why did these factors cause long-run aggregate supply to decrease?

           

During the Great Recession, the U.S. ________ curve shifted to the ________.

           

During the Great Recession, the U.S. ________ curve shifted to the ________.

           

 During the Great Recession, the U.S. aggregate demand curve shifted to the left, in part, because:

           

During the Great Recession, the U.S. aggregate demand curve shifted to the left, in part, because:

           

During the Great Recession, the U.S. long-run aggregate supply curve shifted to the left, in part, because:

           

During the Great Recession, the U.S. aggregate demand curve shifted to the left, in part, because:

           

When U.S. aggregate demand and long-run aggregate supply decreased during the Great Recession:

           

A decrease in U.S. housing prices would tend to cause:

           

An institutional breakdown in U.S. financial markets would tend to cause:

           

A decline in U.S. wealth would tend to cause:

           

During the Great Recession, ___________ caused aggregate demand to decrease.

           

During the Great Recession, ___________ caused aggregate demand to decrease.

           

During the Great Recession, __________ caused long-run aggregate supply to decrease.

           

During the Great Recession, long-run aggregate supply decreased. This was caused by __________.

           

The Great Recession is characterized by a decrease in aggregate demand. __________ would have caused such a decrease.

           

 When stock prices declined during the Great Recession, it caused aggregate demand to decrease because:

           

When financial markets went into a crisis during the Great Recession, it caused long-run aggregate supply to decrease because:

           

When U.S. housing prices declined prior to and during the Great Recession, it caused aggregate demand to decrease because:

 

During the Great Recession, U.S. household wealth declined, leading to a decrease in aggregate demand. Which pair of factors contributed to this decline in wealth?

           

 During the Great Recession, consumer sentiment in the United States declined, leading to a decrease in consumer spending. Which of the following factors caused this decrease in consumer sentiment?

           

A stock market crash in __________ is generally viewed as the beginning of the Great Depression.

           

The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as:

           

One similarity between the Great Depression and the Great Recession is that in both cases:

           

One difference between the Great Recession and the Great Depression is that:

           

Which of the following best summarizes the main causes of the Great Depression?

           

The Great Depression ended in:

           

 The Great Depression actually consisted of two recessions, the first of which began in _________ and ended in _________.

           

The Great Depression actually consisted of two recessions, the second of which began in _________ and ended in _________.

           

 The Great Depression actually consisted of two separate recessions. The “first wave” of the Great Depression first began in _________ and initially lasted for _________.

           

 The Great Depression actually consisted of two separate recessions. The “second wave” of the Great Depression began in _________ and lasted for _________.

           

In comparison with other recessions, the Great Depression:

           

When compared to other recessions, the Great Depression:

           

One of the reasons why the Great Depression was so severe is that:

           

One of the reasons why the Great Depression was so severe is that:

           

The Great Depression had _________ when compared to the average recession.

           

When held up against other economic downturns, the Great Depression:

           

When contrasted with other recessions, the Great Depression:

           

The Great Depression, when compared to other economic downturns in U.S. history:

           

When considering the magnitude of the Great Depression in comparison to other recessions, the Great Depression:

           

The Great Depression lasted longer and was deeper than the average recession, in part, because:

           

The Great Depression lasted longer and was deeper than the average recession, in part, because:

           

During the Great Depression, a major financial crisis followed the collapse of the stock market, which led to:

           

During the Great Depression, there was a financial crisis and a stock market crash, both of which:

           

Use the following graph to answer the next six questions. This graph depicts an economy where aggregate demand has decreased, with no change in either short-run aggregate supply (SRAS) or long-run aggregate supply (LRAS).

 

      

As a result of aggregate demand decreasing, we can see that the price level ________ and real gross domestic product (GDP) _________.

           

The graph accurately summarizes what happened during the Great Depression, because during that time, the price level _________ and real gross domestic product (GDP) _________.

           

Which of the following would have caused aggregate demand to decrease in the graph, such as occurred during the Great Depression?

           

During the Great Depression, the aggregate price level and real gross domestic product (GDP) both decreased, as depicted in the graph. Unemployment increased to record levels. Which of following best explains why this happened?

           

During the Great Depression, the aggregate price level fell by 20% as depicted in the graph, suggesting that:

           

In the graph, aggregate demand decreases, causing a decrease in the aggregate price level and real gross domestic product (GDP), just like during the Great Depression. If short-run aggregate supply had decreased by the same margin as aggregate demand, how would the economy have behaved differently?

           

When the U.S. aggregate demand curve shifted to the left during the Great Depression:

           

When the U.S. aggregate demand curve shifted to the left during the Great Depression:

           

During the Great Depression, thousands of U.S. banks failed. As a result:

           

During the Great Depression, aggregate demand decreased. This would have been caused by:

           

As a result of several factors, aggregate demand decreased during the Great Depression. One factor would be:

           

Which of the following would have caused aggregate demand to decrease during the Great Depression?

           

The Great Depression is characterized by a decrease in aggregate demand. Of the following factors, which would have caused aggregate demand to decrease?

           

The primary cause of the Great Depression was a decrease in aggregate demand. Which of the following events would have caused such a decrease?

           

During the Great Depression, aggregate demand in the U.S. economy decreased. As a result, the price level _________ and real gross domestic product (GDP) _________.

           

During the Great Depression, aggregate demand in the U.S. economy decreased. As a result, the unemployment rate _________ and real gross domestic product (GDP) _________.

           

During the Great Depression, aggregate demand in the U.S. economy decreased. As a result, the unemployment rate _________ and the price level _________.

           

 When stock prices declined during the Great Depression, it caused aggregate demand to decrease because:

           

When the government raised taxes at the beginning of the Great Depression, it caused aggregate demand to decrease because:

           

When 9,000 banks failed during the Great Depression, it caused aggregate demand to decrease because:

 

 When the government pursued a “tight money” policy during the Great Depression, it caused aggregate demand to decrease because:

           

Classical economists believe that:

           

Among the beliefs held by classical economists, one is that:

 

Keynesian economists believe that:

           

When describing how the economy works, classical economists claim that:

           

In regard to the macroeconomy, it is believed by classical economists that:

           

When considering how the economy works, classical economists hold that:

           

If asked about the basic functioning of the economy, a classical economist would claim that:

           

If you asked a classical economist which economic time frame she prioritized, how might she respond?

           

If a classical economist were asked which factor is most important to ensuring economic growth, how might he respond?

           

Classical economists believe that when aggregate demand changes, the economy remains at full employment because:

           

Classical economists believe that prices are completely flexible, from which they conclude that:

           

 Based on the belief that prices are very flexible, classical economists conclude that:

           

According to classical economists, changes in aggregate demand have little effect on the overall economy, and therefore:

           

Which of the following policy statements would a classical economist tend to support?

           

Which of the following economic statements would a classical economist tend to support?

           

Which of the following economic statements would a classical economist tend to support?

           

Classical economists believe that government intervention in the economy is unnecessary because:

           

 Classical economists believe that savings is crucial for economic growth because:

           

 Classical economists believe that the economy is stable and tends toward full employment because:

           

Use the following graph to answer the next two questions. The graph depicts an economy where aggregate demand has decreased. Note that long-run aggregate supply remains changed.

 

 

The graph shows a decrease in the price level due to a decrease in aggregate demand. Real gross domestic product (GDP), however, does not change. The best explanation for the events depicted on this graph is that:

           

The graph shows a decrease in the price level due to a decrease in aggregate demand. Real gross domestic product (GDP), however, does not change. If this were an accurate description of how an economy responds during a recession, which of the following would be an appropriate government response to a decrease in aggregate demand?

           

In regard to describing how the economy functions, Keynesian economists claim that:

           

When considering the basic operations of the macroeconomy, Keynesian economists argue that:

           

If prompted to describe fundamental beliefs about the economy, a Keynesian economist would state that:

           

If asked about the basic functioning of the economy, a Keynesian economist would state that:

           

Keynesian economists believe that:

           

If a Keynesian economist were asked to make a statement about the relationship between the government and the economy, what might she say?

           

If you were to ask a Keynesian economist for his perspective on economic stability, what might he say?

           

Keynesian economists believe that prolonged recessions are possible because:

           

Keynesian economists believe that prices are sticky and do not adjust quickly, from which they concluded that:

           

 Based on the belief that prices are sticky and inflexible, Keynesian economists conclude that:

           

 Which of the following policy statements would a Keynesian economist tend to support?

           

Keynesian economists believe that savings is a drain on demand because:

           

Keynesian economists believe that government intervention in the economy is necessary because:

           

Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because:

           

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because: