Saint Leo ECO 201 Chapter 11 Quiz Answers

Saint Leo ECO 201 Chapter 11 Quiz
Answers
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-leo-eco-201-chapter-11-quizanswers/
Saint Leo ECO 201 Chapter 11 Quiz Answers
Consider a country whose economic structure matches the assumptions of the classical model.
After reading a recent best-seller documenting a growing population of
low−income elderly people who were ill−prepared for retirement, most residents of this country decide to
increase their saving at any given interest rate.
1. From the list given below choose the letter that gives the resulting outcome for each of the following
variables:
2. The model of long-run equilibrium
3. One of the main conclusions of Say's Law was that
4. Suppose that aggregate demand were to decrease due to a stronger dollar. Which of the following
would be the result?
5. Suppose that an economy begins in equilibrium at E1as depicted in the graph to the right.
Assume that the economy follows the Classical Model assumptions.
6. Workers unionize to retain higher wages, which moves the economy further from full employment.
7. The extent to which real GDP responds to changes in the price level along the short-run
aggregate supply curve is largely determined by
8. Which of the following is a possible explanation for sticky prices?
9. The Keynesian Model of the macroeconomy argues that prices are sticky due to labor
contracts and unions.
10. An important difference between the Classical Model and the Keynesian Model is that
the
11. What did Keynes mean when he said that prices are sticky?
12. If the prices were sticky, according to Keynes, this would then imply that the
13. An important difference between the Classical Model and the Keynesian Model is that
14. The Keynesian Model was supported empirically by data from the decade of the
15. The Modern Keynesian short-run aggregate supply curve is best described by which of
the following statements?
16. The macroeconomy is depicted by the graph to the right.
17. In the Modern Keynesian Model the short run aggregate supply curve slopes upward.
How could one explain the shape of the upward sloping short-run aggregate supply curve by only
focusing on the capital input?
18. How could one explain the shape of the upward sloping short-run aggregate supply
curve by only focusing on profits?
19. The modern Keynesian Model assumes that

20. Since the modern Keynesian Model allows for some price response, the aggregate
supply curve
21. The macroeconomy is depicted by the graph to the right
22. In the modern Keynesian Model the short-run aggregate curve slopes upward. How
does this model explain the reason behind this upward sloping curve when it only addresses
labor input?
23. Which of the following is the best example of uncounted production?
24. The long-run aggregate supply curve will not shift if there is a change in
25. All of the following will shift the short-run aggregate supply and the long-run
aggregate supply exceptfor
26. Suppose that the barrel price of petroleum decreased temporarily. The result of this
would be best described by
27. Which of the following best describes the result of this event?
28. Which of the following will increase both the short-run and long-run aggregate supply
curves?
29. Which of the following is true concerning shifts of the long-run aggregate supply
curve?
30. Between early 2005 and late 2007, total planned expenditures by U.S. households
substantially increased in response to an increase in the quantity of money in circulation. From a
short-run Keynesian perspective, the predicted effects of this event on the equilibrium U.S. price
level and equilibrium U.S. real GDP were