Exam 4 Flashcards
(36 cards)
1) Which of the following will cause an increase in unemployment and inflation at the same time?
A leftward shift of aggregate supply.
2) A leftward shift in aggregate demand will cause a decrease in both output and price level if aggregate supply is
Upward-sloping to the right.
3) The Phillips curve shows
A historical (inverse) relationship between the rate of unemployment and the rate of inflation.
4) Supply-side tax cuts are designed to
Reduce marginal tax rates.
5) A progressive tax system
Means higher marginal tax rates at higher income levels.
6) What impact do transfer payments have?
They reduce the incentive to work and shift AS to the left.
7) An increase in the restrictions on immigration will shift the
AS curve to the left
8) Which of the following is a major goal of short-run macroeconomic policy?
Move toward the production possibilities curve and full employment.
9) In the short run movement toward a fixed production possibilities curve comes from
Increased use of our productive capabilities.
10) Economic growth implies a
Rightward shift of the long-run aggregate supply curve
11) Economic growth
Is measured using real GDP.
12) In recent decades a primary source of growth in U.S. output has been
Increased productivity per worker.
13) Human capital is
The knowledge and skills possessed by the labor force.
14) Tax credits for new investment are likely to
Increase physical capital investment.
Long-run economic growth can be illustrated in Figure 17.1 by a
Shift outward of the production possibilities curve.
20) A tax cut can best be characterized as
Both fiscal and supply-side policy.
16) Which of the following is an example of supply-side policy?
Tax incentives for business investment.
17) Which of the following is both a supply-side and a fiscal policy tool during a recession?
Tax cuts.
18) The index of leading indicators is a factor that
We can observe today that is logically linked to future economic performance.
19) If the United States has a trade deficit this means that
The trade balance is negative.
20) Over a given period of time if exports are greater than imports the result is
A trade surplus.
21) The benefits from international trade include
Greater efficiency in the use of the world’s limited resources.
Based on the information in Table 35.1 assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no goods. From the information in Table 35.1 it is clear that
The United States has an absolute advantage in both goods.
23) When a country imposes tariffs it is likely to cause
Higher prices for the import-competing goods both domestically and abroad.
