Econ 101: Intermediate Macroeconomics Lecture 8 Quiz
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Questions and Answers

What is the average annual GDP growth over the long run?

  • 5% (correct)
  • 3%
  • 9%
  • 7%

    • Which tends to be less volatile during fluctuations, consumption or investment?

  • Consumption (correct)
  • Investment
  • Neither is volatile
  • Both are equally volatile

    • During which economic phase does unemployment rise?

  • Boom
  • Stagnation
  • Expansions
  • Recessions (correct)

    • What is Okun's law related to?

    <p>Negative relationship between GDP and unemployment</p> Signup and view all the answers

    What are Leading Economic Indicators used for by businesses and government?

    <p>Forecast changes in economic activity into the future</p> Signup and view all the answers

    In the context of leading economic indicators, which of the following is considered a lagging indicator?

    <p>Consumer Price Index (CPI)</p> Signup and view all the answers

    In the AS-AD model, what does an increase in the price level cause in terms of real money balances and the demand for goods and services?

    <p>A decrease in real money balances and a decrease in the demand for goods and services</p> Signup and view all the answers

    What does the long-run aggregate supply (LRAS) curve look like?

    <p>It is vertical</p> Signup and view all the answers

    What does 'full employment' mean in the context of long-run aggregate supply (LRAS)?

    <p>Unemployment equal to its natural rate</p> Signup and view all the answers

    Which time horizon in macroeconomics assumes complete price flexibility?

    <p>Long run</p> Signup and view all the answers

    What is the average annual GDP growth over the long run?

    <p>X percent</p> Signup and view all the answers

    During which economic phase does unemployment rise?

    <p>Recession</p> Signup and view all the answers

    What does Okun’s law describe?

    <p>The negative relationship between GDP and unemployment</p> Signup and view all the answers

    What do Leading Economic Indicators aim to forecast?

    <p>Changes in economic activity next few years into the future</p> Signup and view all the answers

    What does the quantity theory of money equation 𝑴𝑽 =𝑷𝒀 imply?

    <p>An inverse relationship between the price level and the quantity of output demanded</p> Signup and view all the answers

    In the context of leading economic indicators, which of the following is considered a lagging indicator?

    <p>Hotel Occupancy Rate (HOTOCC)</p> Signup and view all the answers

    What does 'full employment' mean in the context of long-run aggregate supply (LRAS)?

    <p>Unemployment equals its natural rate</p> Signup and view all the answers

    What is the relationship between the price level and aggregate output in the long run?

    <p>The price level has no effect on aggregate output in the long run</p> Signup and view all the answers

    What does an increase in the price level cause in terms of real money balances and the demand for goods and services according to the AS-AD model?

    <p>A decrease in real money balances and a decrease in the demand for goods and services</p> Signup and view all the answers

    Which factor determines output in the long run according to aggregate supply?

    <p>Factor supplies and technology</p> Signup and view all the answers

    What is assumed to be sticky at a predetermined level in the short run?

    <p>$\text{Many prices}$</p> Signup and view all the answers

    Which economic phase does unemployment rise?

    <p>$\text{Short run}$</p> Signup and view all the answers

    What is affected by fiscal policy (𝐺 and 𝑇) according to the short run model of aggregate demand and supply?

    <p>Output and employment</p> Signup and view all the answers

    Which of the following is used to forecast future economic trends according to leading economic indicators?

    <p>Number of New Business Incorporations (NEWBUS)</p> Signup and view all the answers

    What does the aggregate demand curve show in relation to the price level according to the AS-AD model?

    <p>The relationship between the price level and quantity of output demanded</p> Signup and view all the answers

    What is determined by supply side factors such as supplies of capital, labor, and technology in macroeconomics?

    <p>Aggregate output in long run</p> Signup and view all the answers

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