Exam 2

Question 1

What is AE

Answer 1

(aggregate equilibrium)

Question 2

What is autonomous

Answer 2

does not depend on national income

Question 3

what is induced

Answer 3

depends on national income

Question 4

Neo-Classicals

Answer 4

Fiscal YES

Monetary NO

Question 5

Neo-Keynesians

Answer 5

Fiscal NO

Monetary YES

Question 6

what is a fiscal policy

Answer 6

The government changing it’s spending and/or taxes

Question 7

What is a monetary policy

Answer 7

The central bank changing its interest rate

Question 8

What is the short run multiplier?

Answer 8

Represents the total desired spending by all economic agents in
the economy (consumers, producers, and the government)

Question 9

What shifts the AD curve?

Answer 9

Consumer spending