Economic fluctuations

Economic fluctuations

Multiple Choice

Which of the given macroeconomic variables is not decreasing during the economic downturn:

• unemployment

• investment

• GDP

• consumption

Multiple Choice

According to Okun's law when the unemployment rate grow from 3% to 5%, real GDP decreases by 6 percentage points.

• true

• false

Multiple Choice

In the short run, in comparison to the long run:

• clasical dichotomy no longer works

• prices are flexible

• money is neutral

• all the answers are correct

Multiple Choice

The long-run aggregate supply curve is vertical because the amount of output produced depends on the fixed amounts of capital and labor and on the available technology.

• true

• false

Multiple Choice

The increase in the aggregated demand in the long run:

• increases price only

• decreases price only

• increases price and decreases output

• decreases price and increases output

Multiple Choice

Horizontal supply line is the illustration of the extreme price stickiness.

• true

• false

Multiple Choice

COVID-19 lockdown caused a decrease in demand. According to the economic theory, in the long run, it should generate only:

• decrease in the price level

• increase in the price level

• increase in output

• decrease in output

Multiple Choice

New quality requirements imposed on producers, expanding obligatory warranty period, are the example of:

• adverse supply shock

• adverse demand shock

• favorable supply shock

• favorable demand shock

Multiple Choice

To weaken the adverse effect of supply shock policymakers can decrease aggregate demand.

• true

• false

Multiple Choice

Monetary policy will reduce the money supply, by decreasing interest rates, to weaken the favorable demand shock.

• true

• false

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