Podcast
Questions and Answers
What happens to the aggregate demand curve when government purchases are decreased?
What happens to the aggregate demand curve when government purchases are decreased?
- It shifts to the right
- It becomes steeper
- It shifts to the left (correct)
- It remains unchanged
Which factor helps explain the multiplier effect in economics?
Which factor helps explain the multiplier effect in economics?
- Government austerity measures
- Increase in interest rates
- Re-spending of income in the circular flow model (correct)
- Decrease in consumer confidence
What is the role of money in a transaction involving purchasing jeans at the mall?
What is the role of money in a transaction involving purchasing jeans at the mall?
- Unit of account
- Medium of exchange (correct)
- Store of value
- Standard of deferred payment
What action can a bank take if it doesn't have enough reserves to meet requirements?
What action can a bank take if it doesn't have enough reserves to meet requirements?
Which policy tool is the principal mechanism for directly changing banking system reserves?
Which policy tool is the principal mechanism for directly changing banking system reserves?
What term refers to the fraction of each additional dollar of disposable income spent on consumption?
What term refers to the fraction of each additional dollar of disposable income spent on consumption?
What will happen to the aggregate demand curve if there is a decrease in government spending?
What will happen to the aggregate demand curve if there is a decrease in government spending?
In the context of the text, what would be the effect of a tax cut on the aggregate demand curve?
In the context of the text, what would be the effect of a tax cut on the aggregate demand curve?
If there is a decrease in consumer spending, what will happen to the aggregate demand curve?
If there is a decrease in consumer spending, what will happen to the aggregate demand curve?
What is the impact of an increase in government spending by an amount less than the GDP gap on closing the GDP gap?
What is the impact of an increase in government spending by an amount less than the GDP gap on closing the GDP gap?
Assuming a MPC of 0.75, what would be the total change in spending for the economy due to a $20 billion new government spending injection?
Assuming a MPC of 0.75, what would be the total change in spending for the economy due to a $20 billion new government spending injection?
Based on the text, what is the appropriate change in the U.S. economy given that the stock market's value more than doubled between 1921 and 1927?
Based on the text, what is the appropriate change in the U.S. economy given that the stock market's value more than doubled between 1921 and 1927?
What is the Keynesian approach to achieving full employment during a recession?
What is the Keynesian approach to achieving full employment during a recession?
Which of the following accurately defines inflation?
Which of the following accurately defines inflation?
What would be the result of an increase in the cost of natural gas on the aggregate supply curve?
What would be the result of an increase in the cost of natural gas on the aggregate supply curve?
Which action would not be recommended by the classical approach for achieving full employment during a recession?
Which action would not be recommended by the classical approach for achieving full employment during a recession?
What policy would reduce a budget deficit and provide fiscal restraint?
What policy would reduce a budget deficit and provide fiscal restraint?
What does Say's Law imply about long-term output changes in the economy?
What does Say's Law imply about long-term output changes in the economy?
