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Question 1 of 10
Which of the following is a problem with the price system
that can lead to a breakdown in the coordination of economic activity?
A.The price system works silently in the background.
B.Prices can be slow to adjust.
C.Prices may be flexible.
D.all of the above
Question 2 of 10
If prices are sticky
A.economic activity will be coordinated efficiently.
B.economic activity will not be coordinated efficiently.
C.prices will quickly adjust to changes in demand.
D.quantity supplied will always equal quantity demand.
Question 3 of 10
What are some reasons why coordination of economic affairs
through the price system may not work perfectly?
A.may be too few prices (that is, more markets than prices)
B.prices may not contain sufficient information
C.prices may be ""sticky.
D.all of the above
Question 4 of 10
One reason the aggregate demand curve is downward sloping is
because of the
A. interest rate effect.
Question 5 of 10
Which of the following would cause an increase in aggregate
demand in the short run?
A.an increase in the supply of money
B.a decrease in the price level
C.an increase in taxes
D.a crop failure
Question 6 of 10
The long-run aggregate supply curve is
C.a vertical line at potential output.
D.a horizontal line at the current price level.
Question 7 of 10
In the long run
A.price and output levels are mutually dependent.
B.the level of output depends on the price level.
C.the level of output is independent of the price level.
D.the price level depends on the level of output.
Question 8 of 10
What are the two tools of fiscal policy that governments can
use to stabilize an economy?
A.government spending and technology improvements
B.government spending and taxation
C.taxation and controlling imports
D.taxation and controlling exports
Question 9 of 10
An increased federal budget deficit resulting from a
recession can actually help stabilize an economy through transfer payments
because an increased budget deficit will ________ transfer payments and thereby
the income of some households.
Question 10 of 10
Using expansionary policies to combat a recession would
A.increase a budget deficit.
B.increase a budget surplus.
C.decrease discretionary spending.
D.increase federal revenue."
Solution ID:393772 | This paper was updated on 26-Nov-2015Price : $25