Introduction to Macroeconomics

<p>The unemployment rate is currently 5%. (A)</p> Signup and view all the answers

<p>Understanding individual consumer behavior to predict aggregate demand. (B)</p> Signup and view all the answers

<p>John Maynard Keynes (D)</p> Signup and view all the answers

<p>Keynes' theories on employment, interest, and money (D)</p> Signup and view all the answers

<p>John Hicks (B)</p> Signup and view all the answers

<p>The Rational Expectations Hypothesis (D)</p> Signup and view all the answers

<p>Monetarism (B)</p> Signup and view all the answers

<p>Edmund Phelps (A)</p> Signup and view all the answers

<p>New Keynesians (C)</p> Signup and view all the answers

<p>The Great Depression (D)</p> Signup and view all the answers

<p>Classical economics assumes flexible prices, while Keynesian economics assumes sticky prices. (A)</p> Signup and view all the answers

<p>All of the above. (D)</p> Signup and view all the answers

<p>Business cycles are driven primarily by real shocks to the economy, such as technological advancements. (D)</p> Signup and view all the answers

<p>Perfect information. (B)</p> Signup and view all the answers

<p>A period of relatively low volatility in economic activity. (C)</p> Signup and view all the answers

<p>Recessions are caused by supply-side factors. (B)</p> Signup and view all the answers

<p>It emphasizes the importance of accounting for how individuals and firms will adapt their behavior in response to policy changes. (C)</p> Signup and view all the answers

<p>The money supply is the primary driver of inflation. (D)</p> Signup and view all the answers

<p>The money supply is the primary driver of inflation. (C)</p> Signup and view all the answers

<p>Government intervention in the economy is essential to manage macroeconomic fluctuations. (D)</p> Signup and view all the answers

<p>They can be used to prove the correctness of economic theory. (B)</p> Signup and view all the answers

<p>Because it expresses a value judgment about what should be done. (C)</p> Signup and view all the answers

<p>Scientific theories should be tested and can be rejected if they are contradicted by evidence. (D)</p> Signup and view all the answers

<p>Positive statement (B)</p> Signup and view all the answers

<p>Economic models are limited but can be valuable tools for understanding and analyzing economic phenomena. (C)</p> Signup and view all the answers

<p>Economic aggregates and entire economies (C)</p> Signup and view all the answers

<p>It describes the economy objectively and factually. (A)</p> Signup and view all the answers

<p>Microeconomics provides the foundation upon which macroeconomics builds. (A)</p> Signup and view all the answers

<p>Say's Law (C)</p> Signup and view all the answers

<p>Total output produced by all businesses (B)</p> Signup and view all the answers

<p>Real Business Cycle Theory (C)</p> Signup and view all the answers

<p>Increasing the minimum wage will reduce poverty. (A)</p> Signup and view all the answers

<p>A significant decrease in economic volatility (A)</p> Signup and view all the answers

<p>Ben Bernanke (C)</p> Signup and view all the answers

<p>Expectations of economic agents can alter the impact of policy changes. (B)</p> Signup and view all the answers

<p>There is a significant relationship between a country's spending on human capital and its economic growth. (B)</p> Signup and view all the answers

<p>To analyze real-world situations by simplifying complex phenomena. (A)</p> Signup and view all the answers

<p>Theories should be continuously testable and subject to falsification. (A)</p> Signup and view all the answers

<p>Every economic model fails to represent reality perfectly but can still be beneficial. (C)</p> Signup and view all the answers

<p>There should be greater investment in education to improve economic outcomes. (A)</p> Signup and view all the answers

<p>Expand and mathematically formulate Keynesian concepts (D)</p> Signup and view all the answers

<p>A recession resulting from supply-side factors (C)</p> Signup and view all the answers

<p>Economic predictions should account for changes in individual behavior. (D)</p> Signup and view all the answers

<p>The money supply (C)</p> Signup and view all the answers

<p>Fiscal policy can help manage business cycles effectively. (C)</p> Signup and view all the answers

<p>Countercyclical Fiscal Policy (A), Effective Demand (D)</p> Signup and view all the answers

<p>IS-LM Model (A)</p> Signup and view all the answers

<p>Edmund Phelps (B)</p> Signup and view all the answers

<p>The Great Depression (D)</p> Signup and view all the answers

<p>Robert Lucas (D)</p> Signup and view all the answers

<p>Classical and Keynesian Economics (C)</p> Signup and view all the answers

<p>Quantity Theory of Money (B)</p> Signup and view all the answers

<p>Relationship between unemployment and inflation (D)</p> Signup and view all the answers

<p>Microeconomics focuses on individual economic agents, while macroeconomics studies the overall economy. (A)</p> Signup and view all the answers

<p>Positive analysis is based on data and facts, while normative analysis is based on opinions and values. (A)</p> Signup and view all the answers

<p>The Great Depression (B)</p> Signup and view all the answers

<p>Edmund Phelps (B)</p> Signup and view all the answers

<p>Bernanke (D)</p> Signup and view all the answers

<p>Classical Economics (C)</p> Signup and view all the answers

<p>New Keynesian Model (A)</p> Signup and view all the answers

<p>Say's Law (C)</p> Signup and view all the answers

<p>Monetarist Counter Revolution (B)</p> Signup and view all the answers

<p>To provide a simplified representation of reality for analysis (A)</p> Signup and view all the answers

<p>Positive statements are concerned with what is, while normative statements are concerned with what ought to be. (B)</p> Signup and view all the answers

<p>Economic theory clearly tells us that we should increase spending on education. (A), Developing countries should spend more on human capital because human capital increases economic growth. (D)</p> Signup and view all the answers

<p>Economic theories are constantly tested and revised, and ultimately rejected if they are falsified. (D)</p> Signup and view all the answers

<p>Economic models should be used with caution and understanding of their limitations. (C)</p> Signup and view all the answers

<p>The Keynesian macroeconomic model (D)</p> Signup and view all the answers

<p>A period of high inflation and high unemployment. (A)</p> Signup and view all the answers

<p>Economic policies can have unintended consequences due to changes in behavior. (C)</p> Signup and view all the answers

<p>Confidence in the effectiveness of government intervention to manage economic fluctuations. (A)</p> Signup and view all the answers

<p>The focus is on short-term solutions to immediate economic problems. (C)</p> Signup and view all the answers

The study of economic aggregates like growth, inflation, and unemployment.

The study of individual decision-makers and market interactions.

Describes the world objectively and fact-based.

Describes how the world should be, includes opinions.

Determining what to produce, how to produce, and for whom.

Statements that can be validated as true or false, but not necessarily true.

Opinion-based statements that cannot be proven true or false.

Simplified versions of reality used to analyze real situations by omitting irrelevant details.

'All models are wrong, but some are useful' highlights model limitations and usefulness.

A systematic process of developing theories through testable predictions and revision.

A state where supply and demand balance across goods, financial, and labor markets.

A criticism of traditional economic policies based on expectations and microfoundations.

An economic model integrating Real Business Cycle theory with price stickiness and monopolistic competition.

In the short run, output is influenced by aggregate demand or total demand for goods and services.

Period of reduced economic volatility from the early 1980s to 2008.

Integration and expansion of Keynes' ideas using mathematical formulations between 1940-1960.

The theory emphasizing that inflation results primarily from changes in the money supply.

A challenge to traditional paradigms, incorporating psychological insights into economic behavior.

The principle that supply creates its own demand.

Economic predictions fail if they ignore changes in people's behavior due to policies.

Economic theory focusing on free markets and supply and demand.

John Maynard Keynes' response to the Great Depression, emphasizing aggregate demand.

The total demand for goods and services at varying price levels.

A model that represents the interaction between the goods market and the money market.

Economic theory emphasizing the role of governments in controlling the amount of money in circulation.

A concept showing the inverse relationship between inflation and unemployment.

A school of thought that incorporates price and wage stickiness into Keynesian economics.

Theory that individuals form expectations about the future based on all available information.

Refers to the goods and services demanded by people in an economy.

The processes and methods firms use to create goods and services.

Determines who receives the goods and services produced in an economy.

Broad factors in the economy such as total output, income, and spending.

Positive describes what is happening; normative describes what should happen.

A prediction that can be empirically tested for accuracy.

The process of disproving a hypothesis or theory based on evidence.

Philosopher who introduced the concept of falsification in science.

A theory that gains general agreement from the scientific community after testing and validation.

A situation where agents are unable to achieve optimal outcomes due to a lack of agreement or cooperation.

A theory that real economic changes, not just monetary factors, drive business cycles.

A market structure where many firms sell products that are similar but not identical.

A combination of inflation and recession caused by supply-side factors, challenging traditional economic models.

Overall indicators like total income, output, and spending in an economy.

Micro focuses on individuals; macro looks at the economy as a whole.

Determining which goods and services to allocate in the economy.

Deciding the methods and processes firms use in production.

Determining who receives the goods and services produced.

Economic models explicitly name their assumptions to clarify analysis and predictions.

Theory stating that money supply is directly related to price levels.

John Maynard Keynes' shift in economics emphasizing aggregate demand during the Great Depression.

Prices that do not adjust quickly to changes in supply and demand.

Economic view focusing on the role of the money supply and inflation.