Question 1

If a classical economist were asked which factor is most important to ensuring economic growth,how might he or she respond?

Accepted Answer

A)   "Encouraging savings is crucial."
B)   "Encouraging immigration into the economy must be a high priority."
C)   "Providing for a strong national defense is more important."
D)   "Government intervention in the economy is of primary importance."
E)   "Being tough on crime is crucial."F) A) and E)
G) A) and C)

Question 2

The Great Depression,when compared to other economic downturns in U.S.history,

Accepted Answer

A)   only affected a few regions of the United States.
B)   was about average in terms of severity.
C)   barely affected the economy at all.
D)   had far higher levels of consumer sentiment.
E)   was the longest economic downturn in the twentieth century.F) C) and D)
G) B) and D)

Question 3

The Great Recession was similar to most other recessions since World War II in that the economy

Accepted Answer

A)   rapidly bounced back and resumed normal growth quickly.
B)   never really declined much at all.
C)   did not return to normal for at least one year.
D)   increased rapidly following the beginning of the recession.
E)   essentially collapsed and never recovered.F) A) and B)
G) C) and D)

Question 4

When contrasted with other recessions,the Great Depression

Accepted Answer

A)   had far higher levels of business investment.
B)   was about average in length.
C)   lasted far longer.
D)   only affected a small percentage of Americans.
E)   had much lower unemployment.F) C) and D)
G) A) and E)

Question 5

One of the reasons why the Great Depression was so severe is that

Accepted Answer

A)   the U.S.government lowered taxes.
B)   stock prices increased during the Great Depression.
C)   expected income increased.
D)   the U.S.government allowed the money supply to decline.
E)   the U.S.government allowed the money supply to increase.F) A) and B)
G) C) and D)

Question 6

Use the following graph to answer the following questions.
 
-Lines Y1 and Y2 represent

Accepted Answer

A)   an aggregate demand adjustment.
B)   short-run aggregate demand (SRA
D)  .
C)   long-run aggregate demand (LRA
D)  .
D)   short-run aggregate supply (SRAS) .
E)   long-run aggregate supply (LRAS) .F) B) and E)
G) D) and E)

Question 7

Define and relate macroeconomic policy,fiscal policy,and monetary policy.

Accepted Answer

Macroeconomic policy deals with any laws...

Question 8

During the Great Recession,the unemployment rate climbed as high as ________ and remained around 8 percent ________ year(s) after the recession began.

Accepted Answer

A)   15 percent; seven
B)   25 percent; eight
C)   10 percent; five
D)   20 percent; one
E)   35 percent; eightF) All of the above
G) C) and E)

Question 9

Explain the Great Depression and the Great Recession from the point of view of Keynesian economics.

Accepted Answer

The Great Depression was a result of nat...

Question 10

In regard to the macroeconomy,it is believed by classical economists that

Accepted Answer

A)   prices are flexible.
B)   the market tends toward instability and cyclical unemployment.
C)   savings is a drain on demand.
D)   aggregate demand is more significant than aggregate supply.
E)   the economy needs help in moving back to full employment.F) None of the above
G) A) and E)

Question 11

Use the following graph to answer the following questions.
 
-The difference between lines X1 and X2 represents a(n)

Accepted Answer

A)   aggregate demand change.
B)   aggregate demand bubble.
C)   long-run aggregate demand bubble.
D)   short-run aggregate supply change.
E)   long-run aggregate supply change.F) B) and D)
G) D) and E)

Question 12

Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased,with no change in short-run aggregate supply (SRAS) .
 
-As a result of aggregate demand and long-run aggregate supply decreasing,we can see that the price level ________ and real gross domestic product (GDP) ________.

Accepted Answer

A)   remained unchanged; decreased
B)   increased; decreased
C)   decreased; remained unchanged
D)   remained unchanged; increased
E)   increased; increasedF) A) and B)
G) A) and C)

Question 13

During the Great Recession,there was a financial crisis,a stock market crash,and a collapse in housing prices,all of which

Accepted Answer

A)   contributed to a very long and deep recession.
B)   helped the U.S.economy perform better than the economies of other countries.
C)   kept unemployment from rising above the historical average.
D)   resulted in a very short and mild recession.
E)   prevented the United States from experiencing a decline in real gross domestic product (GDP) .F) D) and E)
G) B) and E)

Question 14

Compare and contrast Keynesian and classical views on savings and government spending on the macroeconomy.

Accepted Answer

Keynesians emphasize demand and the importance of demand on influencing the economy.Because of this,they see savings as a drain on demand.This extends to government savings; they prefer deficit spending to surplus budgets for this reason.Classical economists emphasize supply and its influence on the economy.They see savings as essential for providing the necessary funds for investment and expansion of production.Because of this,they oppose deficit spending,as it competes with private businesses for loanable funds.They prefer surplus budgets as another source of savings.

Question 15

The Great Recession began in

Accepted Answer

A)   December 2009.
B)   June 2009.
C)   August 1929.
D)   December 2007.
E)   January 1930.F) A) and B)
G) A) and C)

Question 16

During the Great Depression,aggregate demand in the U.S.economy decreased.As a result,the unemployment rate ________ and the price level ________.

Accepted Answer

A)   decreased; increased
B)   remained unchanged; increased
C)   increased; remained unchanged
D)   remained unchanged; remained unchanged
E)   increased; decreasedF) None of the above
G) A) and E) E

Question 17

Keynesian economists believe that

Accepted Answer

A)   the market tends toward stability and full employment.
B)   the economy needs help in moving back to full employment.
C)   savings is crucial to growth.
D)   prices are flexible.
E)   the long run is more important than the short run.F) D) and E)
G) C) and E) B

Question 18

Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased,with no change in short-run aggregate supply (SRAS) .
 
-Which of the following would have caused aggregate demand to decrease in the graph,such as occurred during the Great Recession?

Accepted Answer

A)   an increase in expected income
B)   a decrease in tax rates
C)   a decrease in housing prices and stock prices
D)   an increase in consumer sentiment
E)   an advancement in technologyF) A) and C)
G) A) and B)

Question 19

During the Great Depression,the U.S.aggregate demand curve shifted to the left,in part,because

Accepted Answer

A)   there was a huge discovery of gold in the western United States.
B)   the U.S.government decreased the supply of money.
C)   there was an advancement in technology in manufacturing.
D)   there was an increase in trade with other countries.
E)   the U.S.government decreased taxes.F) D) and E)
G) A) and D)

Question 20

When did the Great Recession begin and end? How many months did it last? When did the Great Depression begin and end? How many months did it last?

Accepted Answer

The Great Recession began in December 20...

Exam 27: The Great Recession, the Great Depression, and Great Macroeconomic Debates

If a classical economist were asked which factor is most important to ensuring economic growth,how might he or she respond?

Correct Answer
verified

The Great Depression,when compared to other economic downturns in U.S.history,

Correct Answer
verified

The Great Recession was similar to most other recessions since World War II in that the economy

Correct Answer
verified

When contrasted with other recessions,the Great Depression

Correct Answer
verified

One of the reasons why the Great Depression was so severe is that

Correct Answer
verified

Use the following graph to answer the following questions. -Lines Y1 and Y2 represent

Correct Answer
verified

Define and relate macroeconomic policy,fiscal policy,and monetary policy.

Correct Answer
verified
Macroeconomic policy deals with any laws...
View Answer

During the Great Recession,the unemployment rate climbed as high as and remained around 8 percent year(s) after the recession began.

Correct Answer
verified

Explain the Great Depression and the Great Recession from the point of view of Keynesian economics.

Correct Answer
verified
The Great Depression was a result of nat...
View Answer

In regard to the macroeconomy,it is believed by classical economists that

Correct Answer
verified

Use the following graph to answer the following questions. -The difference between lines X1 and X2 represents a(n)

Correct Answer
verified

Correct Answer
verified

During the Great Recession,there was a financial crisis,a stock market crash,and a collapse in housing prices,all of which

Correct Answer
verified

Compare and contrast Keynesian and classical views on savings and government spending on the macroeconomy.

The Great Recession began in

Correct Answer
verified

During the Great Depression,aggregate demand in the U.S.economy decreased.As a result,the unemployment rate and the price level .

Correct Answer
verified
E

Keynesian economists believe that

Correct Answer
verified
B

Correct Answer
verified

During the Great Depression,the U.S.aggregate demand curve shifted to the left,in part,because

Correct Answer
verified

When did the Great Recession begin and end? How many months did it last? When did the Great Depression begin and end? How many months did it last?

Correct Answer
verified
The Great Recession began in December 20...
View Answer

Exam 27: The Great Recession, the Great Depression, and Great Macroeconomic Debates

If a classical economist were asked which factor is most important to ensuring economic growth,how might he or she respond?

Correct AnswerverifiedShow Answer

The Great Depression,when compared to other economic downturns in U.S.history,

Correct AnswerverifiedShow Answer

The Great Recession was similar to most other recessions since World War II in that the economy

Correct AnswerverifiedShow Answer

When contrasted with other recessions,the Great Depression

Correct AnswerverifiedShow Answer

One of the reasons why the Great Depression was so severe is that

Correct AnswerverifiedShow Answer

Use the following graph to answer the following questions. -Lines Y1 and Y2 represent

Correct AnswerverifiedShow Answer

Define and relate macroeconomic policy,fiscal policy,and monetary policy.

Correct AnswerverifiedMacroeconomic policy deals with any laws...View AnswerShow Answer

During the Great Recession,the unemployment rate climbed as high as ________ and remained around 8 percent ________ year(s) after the recession began.

Correct AnswerverifiedShow Answer

Explain the Great Depression and the Great Recession from the point of view of Keynesian economics.

Correct AnswerverifiedThe Great Depression was a result of nat...View AnswerShow Answer

In regard to the macroeconomy,it is believed by classical economists that

Correct AnswerverifiedShow Answer

Use the following graph to answer the following questions. -The difference between lines X1 and X2 represents a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

During the Great Recession,there was a financial crisis,a stock market crash,and a collapse in housing prices,all of which

Correct AnswerverifiedShow Answer

Compare and contrast Keynesian and classical views on savings and government spending on the macroeconomy.

The Great Recession began in

Correct AnswerverifiedShow Answer

During the Great Depression,aggregate demand in the U.S.economy decreased.As a result,the unemployment rate ________ and the price level ________.

Correct AnswerverifiedE

Keynesian economists believe that

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

During the Great Depression,the U.S.aggregate demand curve shifted to the left,in part,because

Correct AnswerverifiedShow Answer

When did the Great Recession begin and end? How many months did it last? When did the Great Depression begin and end? How many months did it last?

Correct AnswerverifiedThe Great Recession began in December 20...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Macroeconomic policy deals with any laws...
View Answer

During the Great Recession,the unemployment rate climbed as high as and remained around 8 percent year(s) after the recession began.

Correct Answer
verified

Correct Answer
verified
The Great Depression was a result of nat...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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During the Great Depression,aggregate demand in the U.S.economy decreased.As a result,the unemployment rate and the price level .

Correct Answer
verified
E

Correct Answer
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B

Correct Answer
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Correct Answer
verified

Correct Answer
verified
The Great Recession began in December 20...
View Answer