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Eco/372 Final

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Eco/372 Final
Eco/372 Final
25/30
1) The largest source of household income in the U.S. is obtained from
B. wages and salaries
2) The market where business sell goods and services to households and the government is called the
A. goods market
3) Real gross domestic product is best defined as
C. the market value of all final goods and services produced in an economy, stated in the prices of a given year
4) Underemployment includes people
B. who are working part time, or not using all their skills at a full-time job
5) The Bureau of Economic Analysis is responsible for which of the following?
C. Calculating U.S. gross domestic product]
6) The Federal Reserve provides which of the following data?
A. Federal funds rate
7) Consider if the government instituted a 10 percent income tax surcharge. In terms of the AS/AD model, this change should have
A. shifted the AD curve to the left
8) If the depreciation of a country's currency increases its aggregate expenditures by 20, the AD curve will
A. shift right by more than 20 9) Aggregate demand management policies are designed most directly to
C. control the aggregate level of spending in the economy
10) Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model?
A. An increase in government spending
11) According to Keynes, market economies
C. may recover slowly after they experience a significant decline in aggregate demand
12) The laissez-faire policy prescription to eliminate unemployment was to
A. eliminate labor unions and government policies that hold real wages too high
13) In the AS/AD model, an expansionary monetary policy has the greatest effect on the price level when it
A. increases both nominal and real income
14) The Federal funds rate
D. is an intermediate
15) What tool of monetary policy will the Federal Reserve use to increase the

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