← Economics Exam 2 Test
5 Written Questions
5 Matching Questions
- Aggregate Demand (AD)
- Unexpected inflation/ Hyperinflation
- Nondurable goods
- Change in Aggregate Supply (AS)
- Recessionary Gap
- a the output gap that occurs when the actual output is less than the potential output
- b Extremely high rates of inflation for sustained periods of time.
- c (Rightward shifts)
1. Lower cost
2. possitive Government policy
4. Favorable weather
1. Higher costs
2. negative Government policy
Unfavorable weather, natural disaster
- d Tangible items consumed in a short period of time, such as food (less than 3 years)
- e the total demand for all the final goods and services in the economy
5 Multiple Choice Questions
- residual claimants of corporate resources who receive a proportion of profits based upon the ration of shares held
- An upward trend in the real per capita output of goods and services. improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve outward
- the reported interest rate that is not adjusted for inflation
- Consumption (C)
Government Purchases (G)
and Net exports (X-M)
- longer-lived consumer goods, such as automobiles, refrigerator, washing machine usually last more than 3 years.
5 True/False Questions
Macroeconomic Goals (3) → An upward trend in the real per capita output of goods and services. improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve outward
(Cyclical Unemployment)- → the unemployment that results from workers searching for suitable jobs and firms looking for suitable workers.
Ex- graduate from college and spend two weeks looking for a job
LRAS → Short Run aggregate supply is the graphical relationship between RGDP and the price level when output prices can change but input prices are unable to adjust.
Supply Shocks → unexpected temporary events that can either increase or decrease aggregate supply
Ex- major widespread flooding, earthquakes, droughts, and other disasters can increase the costs of production, causing the short-run aggregate supply cure to shift to the left.
Demand-Pull inflation → a price-level increase due to an increase in aggregate demand