Econ 102 - Principles of Macroeconomics » Fall 2022 » The Keynesian Model The Demand-Side Quiz

Need help with your exam preparation?

Existing Quiz Clients Login here
Question #1
The equilibrium level of GDP is the level at which
A.   aggregate demand exceeds output.
B.   aggregate demand is less than output.
C.   inventories are being depleted to meet demand.
D.   aggregate demand equals output.
Question #2
An inflationary gap will exist when the full employment level of GDP is
A.   equal to equilibrium GDP.
B.   less than equilibrium GDP.
C.   greater than disposable income.
D.   greater than equilibrium GDP.
Question #3
Each C + I + G + (X - IM) expenditure schedule is drawn assuming a specific
A.   income level.
B.   price level.
C.   production level.
D.   spending level.
Question #4
In a market economy, the decisions about what to produce and how much of each good or service to produce are made by
A.   government officials.
B.   central bankers.
C.   consumers and producers.
D.   economic planners.
Question #5
Writing during the Great Depression, Keynes naturally focused on problems of
A.   trade deficits.
B.   budget deficits.
C.   hyperinflation.
D.   unemployment.
Question #6
As the multiplier process works through time, the size of the multiplier effect becomes
A.   explosive.
B.   smaller.
C.   constant.
D.   larger.
Question #7
If the price level rises, the effect on the expenditure schedule and equilibrium real GDP is to
A.   shift the expenditure schedule downward and increase equilibrium real GDP.
B.   shift the expenditure schedule upward and decrease equilibrium real GDP.
C.   increase both.
D.   decrease both.
Question #8
If the expenditure schedule must be shifted upward to reach potential GDP, then the economy is experiencing a (n)
A.   inflationary gap.
B.   expansionary gap.
C.   precautionary gap.
D.   recessionary gap.
Question #9
If inventory levels are decreasing, then we should expect business firms to
A.   lay off workers.
B.   increase output.
C.   decrease prices.
D.   decrease output.
Question #10
The basic reason for the multiplier effect is that, when you spend money,
A.   another person receives income.
B.   your money balances are reduced.
C.   another person must pay for it.
D.   your net worth decreases.

Need help with your exam preparation?

Existing Quiz Clients Login here