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ECN 211 Final Exam Review Questions and Answers 100% Correct
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ECN 211 Final Exam Review Questions and Answers 100% Correct
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ECN 211 Final Exam Review Questionsand Answers 100% Correct
Real GDP is commonly used for what? - ANSWER Short run changes.
When real GDP falls, so does what? - ANSWER - Personal income
- Corporate profits
- Consumer spending
- Investment spending
- Industrial production
When the overall economy declines that is due to what? - ANSWER - Reduction
in spending in factories
- Housing
- Inventory
When real GDP declines, what happens to the unemployment rate? - ANSWER
It increases.
What is the natural rate of unemployment? - ANSWER 5% or 6%.
In the short run, what can money supply do? - ANSWER It can temporarily
push real GDP away from the long run.
, Model of aggregate demand/supply - ANSWER Explains the short-run
fluctuations around its long-run trend.
Aggregate demand - ANSWER The curve that shows the quantity of goods and
services households, firms, government, and customers from abroad want to buy
at each price level.
Aggregate supply - ANSWER The curve that shows the quantity of goods and
services firms choose to produce or sell at each price level.
When there's a lower interest rate, what affect does that have on the quantity
demanded? - ANSWER It increases.
When the price level decreases, what affect does that have on the interest rate,
spending, and quantity? - ANSWER - Interest rate decreases
- Spending increases
- Quantity increases
As the real exchange dollar value decreases... - ANSWER Quantity demanded
increases.
When consumption (C), investment (I), government purchases (G), and net
exports (NX) increases, how does the aggregate demand curve shift? -
ANSWER It shifts to the right.
When the government cut taxes, how does the aggregate demand curve shift? -
ANSWER It shifts to the right.
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