1. Which of the following is a valid statement based on the figure below? AS AD Price Level Real GDP A) This figure depicts a Keynesian view of the economy. B) An increase in aggregate supply will not change the price level. C) Policies should focus on increasing aggregate demand to eliminate cyclical unemployment. D) Increasing aggregate demand will not increase the level of real GDP. 2. The current U.S. unemployment rate is about A) 4% B) 9% C) 25% D) 65% 3. Which of the following is consistent with the views of Keynesian economics? A) Lowering marginal tax rates will increase tax revenue. B) The macroeconomy will stabilize itself without government intervention. C) Increases in the money supply will only increase the price level in the long run. D) Fiscal policy is a useful tool for ending a recession. 4. Which of the following is consistent with the views of neoclassical economics? A) Lowering marginal tax rates will increase tax revenue. B) The macroeconomy will stabilize itself without government intervention. C) Increases in the money supply will only increase the price level in the long run. D) Fiscal policy is a useful tool for ending a recession.5. Which of the following is consistent with the views of Supply-side economics? A} lowering marginal tax rates will increase tax revenue. E} The macroeconomy will stabilize itself without government intervention. C} Increases in the money supply will only increase the price level in the long run. D} Fiscal policy is a useful tool for ending a recession. 6. Winch of the following is consistent with the views of monetarism'iI A} Lowering marginal tax rates will increase tax revenue. B} The macroeconomy will stabilize itself without government intervention. C} Increases in the money supply will only increase the price level in the long run. D} Fiscal policy is a useful tool for ending a recession. T. Milton Friedman was the leading gure in developing A} traditional Keynesian economics. E} monetarist economics C} neoclassical economics. D} new Keynesian economics. 3. 1li'ufhlich of the following is considered a determinant of long-urn economic growth\"? A} the interest rate R} changing expectations C} the money supply D} technological advances 9. Neoclassical eoonomists believe wages are exible, whereas Keynesian economists assume that wages are usually sticky in the short run. A} True B} False ll]. According to the monetarists, long-rim increases in real GDP is primarily caused by increases in the money supply. A} True B} False l 1. If the unemployment rate rose, a neoclassical economist would counsel the govenunent to do nothing. A} True E} False 12. A Laffer curve relates tax revenue to interest rates. A} True B} False