Sie sind auf Seite 1von 5

HW Chapter 10: Keynesian Macroeconomics

Which of the following statements is false?


a. Keynes believed that monopolistic elements in the economy will prevent immediate price
declines.
b. Keynes believed that during periods of high unemployment, labor unions will prevent
wages from falling fast enough to restore full employment.
c. Keynes believed that interest rate flexibility will ensure that saving is equal to
investment.
d. Keynes did not believe in Say's law.
Refer to Exhibit 10-2. If autonomous investment decreases, the TE curve will shift
____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.
a. downward; greater
b. downward; less
c. upward; less
d. upward; greater
Two economists, Smith and Jones, are discussing the currently high unemployment rate. Smith
says that something ought to be done quickly because the economy may not be able to restore
itself to full employment. Jones says that it is better to take a "hands-off" approach. Which of the
following is most likely to be true?
a. Smith and Jones are most likely both Keynesian economists with a few minor differences
of opinion.
b. Smith and Jones are most likely both classical economists with a few minor differences
of opinion.
c. Jones is likely to be a Keynesian economist and Smith is likely to be a classical
economist.
d. Smith is likely to be a Keynesian economist and Jones is likely to be a classical
economist.
e. none of the above.
The work of John Maynard Keynes led to a major revolution in economic thought.
a. TRUE
b. FALSE
The marginal propensity to consume (MPC) refers to the proportion of disposable income that is
spent on consumption.
a. TRUE
b. FALSE
In the TE-TP framework, total production
a. always equals total expenditures.
b. equals Real GDP.
c. is always greater than total expenditures.
d. is always less than total expenditures.

According to the efficiency wage model, firms tend to pay workers


a. the market-clearing wage that efficiently equates labor supplied and demanded.
b. in excess of the market-clearing wage to provide an incentive for productivity and
efficiency.
c. less than the market-clearing wage to assure themselves a pool of workers ready to
replace workers who quit.
d. less than the market-clearing wage to minimize labor cost per unit of production.
Refer to Exhibit 10-3. When disposable income equals $2,300, saving equals
1. -20
2. -10
3. 0
4. 10
5. 20
Refer to Exhibit 10-8. The multiplier is
1. 0.90.
2. 10.00.
3. 0.10.
4. 4.00.
5. 0.75.
John Maynard Keynes drew many economists ______________ the classical view. The classical
view held that a market economy __________ regulate itself to avoid periods of excessive
unemployment.
1. toward; can
2. toward; cannot
3. away from; can
4. away from; cannot
If income rises from $1,000 to $1,400 and consumption rises from $1,100 to $1,440, the
marginal propensity to save (MPS) is
1. 0.15.
2. 0.85.
3. 0.25.
4. 0.20.
Keynes believed that
1. the internal structure of the economy is extremely competitive and that wage-price
flexibility exists.
2. monopolistic elements in the economy prevent immediate and sharp price declines in
response to falling demand.
3. even though there are monopolistic elements in the economy, wage-price flexibility
exists.
4. in spite of the competitiveness of the economy, wage-price flexibility does not exist.

Which of the following statements is true?


1. Keynes believed wages are inflexible downward but prices (of goods and services) are
flexible.
2. Keynes believed an economy could get stuck in a recessionary gap.
3. Keynes originated the idea of efficiency wages.
4. Keynes believed the economy is self-regulating.
5. b and c
Here is a consumption function: C = C0 + MPC(Yd). If MPC is 0.75, then we know that
1. as Yd rises by $1, Co rises by $0.75.
2. as Yd rises by $1, C rises by $0.75.
3. Yd rises by $0.75.
4. as C0 rises by $0.75, Yd rises by $1.
Which of the following statements is true?
1. When TP = TE (total production = total expenditures), the economy is necessarily
producing Natural Real GDP.
2. When TP is greater than TE, inventory levels unexpectedly fall.
3. When TE is greater than TP, inventory levels unexpectedly rise.
4. b and c
5. none of the above
Economist Brown believes that changes in aggregate demand affect only the price level, and
economist Black believes that changes in aggregate demand affect only Real GDP. What does
the aggregate supply (AS) curve look like for each economist?
1. For economist Brown the AS curve is vertical and for economist Black the AS curve is
horizontal.
2. For economist Brown the AS curve is horizontal and for economist Black the AS curve is
vertical.
3. For economist Brown the AS curve is upward sloping and for economist Black the AS
curve is downward sloping.
4. For economist Brown the AS curve is downward sloping and for economist Black the AS
curve is upward sloping.
On a TE-TP diagram consider a level of Real GDP at which the vertical distance to the TE line is
less than the vertical distance to the 45-degree line. This Real GDP is __________ its
equilibrium level, with __________.
1. above; TE > TP
2. above; TE < TP
3. below; TE > TP
4. below; TE < TP
The economy is in equilibrium, TP = TE. Then, net exports fall. As a result, the __________
curve shifts __________, inventory levels unexpectedly __________, and business firms
__________ the quantity of good and services they produce.

1.
2.
3.
4.
5.

TE; upward; rise; increase


TP; rightward; rise; decrease
TE; downward; rise; decrease
TE; downward; rise; increase
none of the above

When total production is greater than total expenditures,


1. the economy is in disequilibrium.
2. there are increases in inventory.
3. total output will decrease.
4. all of the above
Refer to Exhibit 10-2. Which of the following is correct about point M?
1. TE is $4,500 billion and TP is only $1,500 billion.
2. TP is $4,500 billion and TE is only $1,500 billion.
3. TE is $7,500 and TP is only $5,500 billion.
4. TP is only $7,500 billion and TE is only $5,500 billion.
5. TE is $3,000 billion and TP is only $1,500 billion.
If total production is less than total expenditures, then business firms
1. have overproduced.
2. will cut back on production.
3. will raise production.
4. will experience increases in inventory.
5. a and d
Total production
1. always equals total expenditures.
2. equals total expenditures in equilibrium.
3. is always greater than total expenditures.
4. is always less than total expenditures.
A rise in MPC makes the total expenditures (TE) curve __________ and __________ the
multiplier.
1. steeper; raises
2. steeper; lowers
3. flatter; raises
4. flatter; lowers
Refer to Exhibit 10-5. When TE is $700 billion, what will firms most likely do next?
1. Firms will increase production to increase inventories to their optimum levels.
2. Firms will neither increase nor decrease production since the economy is in equilibrium.
3. Firms will cut back production to reduce inventories to their optimum levels.
4. It is impossible to determine what firms are likely to do based on this information.

When total expenditures are greater than total production, __________ is produced than
households want to buy, which leads to __________ in inventory, which signals firms that they
have __________, which causes firms to increase production.
1. less; decreases; underproduced
2. more; increases; underproduced
3. less; increases; underproduced
4. more; decreases; overproduced
When the MPC = 0.6, the multiplier is
1. 0.40.
2. 2.50.
3. 1.67.
4. 6.00.
The multiplier process following a drop in autonomous spending is
1. just as powerful as for a rise in autonomous spending.
2. more powerful than for a rise in autonomous spending.
3. less powerful than for a rise in autonomous spending.
4. nonexistent, because the multiplier applies only to a rise in autonomous spending.
Refer to Exhibit 10-3. The multiplier is
1. 4
2. 5
3. 10
4. 1
5. none of the above
Refer to Exhibit 10-8. The marginal propensity to consume (MPC) is
1. 0.90.
2. 0.10.
3. 0.80.
4. 0.95.
5. 0.75.
In the real world, we should expect the multiplier process to work itself out
1. almost instantaneously.
2. within a few days.
3. within about one month.
4. only over many months, perhaps even years.

Das könnte Ihnen auch gefallen