Exam (elaborations)
ECON PRACTICE EXAM 3
- Course
- Institution
ECON PRACTICE EXAM 3
[Show more]
Content preview
ECON PRACTICE EXAM 3In the long run, output gaps are eliminated by - answer- price changes
In the short run______ determines output, and in the long run______ determines
output. - answer- Total spending; potential output
In the long run, total spending only influences: - answer- inflation
In the long run total spending affects_____ and output is determined by______. -
answer- prices;inputs and productivity
"Smart" vending machines, which adjust prices automatically according to changes in
demand factors (like time of day or outside temperature), are examples of: - answer-
flexible price setting
Firms do not change prices frequently because: - answer- it is costly to do so
When actual investment is greater than planned investment: - answer- firms sold less
output than expected
In the Keynesian model, consumption depends on: - answer- disposable income
The slope of the consumption function: - answer- equals the mpc
The tendency of changes in asset prices to affect spending on consumption goods is
called the _____ effect. - answer- wealth
Suppose the stock market crashed, wiping out $5 trillion of household wealth.
Consistent with economic models based on historical trends, consumption spending
might fall by as much as, but probably not more than, - answer- $350 trillion
In the short run with predetermined prices, when output is greater than planned
aggregate expenditure: - answer- planned investment is less than actual investment
For an economy starting at potential output, a decrease in autonomous expenditure in
the short run results in a(n): - answer- recessionary output gap
The smaller the mpc, the _____ the income-expenditure multiplier and the ______ the
effect of a change in autonomous spending on short-run equilibrium output. - answer-
smaller;smaller
In the Keynesian model, a $1 billion increase in autonomous consumption leads to
_______ in short run equilibrium output: - answer- a greater than $1 billion increase
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller GEEKA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now