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econ review

Authored by Sharvi Joshi

Other

12th Grade

Used 8+ times

econ review
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24 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A goal of monetary policy and fiscal policy is to

offset shifts in aggregate demand and thereby stabilize the economy.

offset the shifts in aggregate demand and thereby eliminate unemployment.

enhance the shifts in aggregate demand and thereby create fluctuations in output and employment.

enhance the shifts in aggregate demand and thereby increase economic growth

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long run equilibrium be?

a

b

c

d

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Increases in government spending will lower the long term growth rate of GDP, if it lowers ________ spending and if the government purchases ________ and not ________ goods.

investment; consumption; investment

net export spending; consumption; investment

net export spending; investment; consumption

consumption; investment; consumption

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A\In the short run, an unexpected increase in aggregate demand typically causes

the price level to increase and the unemployment rate to increase.

the price level to increase but has no effect on the unemployment rate.

frictional unemployment to increase but structural unemployment to decrease.

the price level to increase and the unemployment rate to fall.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

An increase in government spending

increases the interest rate and so investment spending decreases.

increases the interest rate and so investment spending increases.

decreases the interest rate and so investment spending decreases.

decreases the interest rate and so increases investment spending increases.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

To keep the budget balanced during the recession when tax revenue is low and government purchase is high, the federal government must _________ government spending, or ________ taxes, and which will ________ aggregate demand.

decrease; increase; reduce

increase; decrease; increase

increase; increase; reduce

decrease; decrease; increase

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the above figure, assume the economy is in equilibrium at point d. Then the Fed decreases the money supply so that the new aggregate demand curve is AD1. In the long run, the new price level will be

130

100

120

110

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