1)The equation for aggregate production includes this term:

capacity utilization / production capacity

production capacity * capacity utilization

national income * capacity utilization

production capacity / capacity utilization

2)If you see a SMTH function in a model's equation, that means the equation

is an average trend over some time period.

contains soft variables

is an identify equation

all of the above

3)The three stocks in the Demand Side model represent _______ households, business firms, and governments.

the number of

the amount of spending by

the amount of financial assets

of none of the above

4)In the Demand Side model, about ___ percent of national income goes to wages and dividends.

none of the above

80

40

60

5)Dividends are paid to

the government

none of the above

workers for their labor

owners of the business firms

6)When household consumption occurs, money flows ___________.

all of the above.

from households to firms

from firms to households

from firms to banks.

7)Business firm purchases of new equipment and facilities is called

retained earnings

dividends

none of the above

investment

8)Aggregate spending ('aggregate demand') includes

government purchases

all of the above

consumption

investment

9)The Demand Side model also includes a complete Supply Side

True

False

10)Which statement best describes the simple macro models you've studied in this course?

Neither side influences the other.

Both sides influence each other.

The Supply Side is influenced by the Demand Side.

The Demand Side is influenced by the Supply Side