Q1.

1. Begin with the Keynesian model in equilibrium. The American Recovery and Reinvestment Act resulted in reduced tax rates and increases in government spending. If tax rates decrease and government spending increases, then what would happen to the equilibrium condition (45-degree line)

The equilibrium condition would shift upward

The equilibrium condition would shift downward

C. the equilibrium condition never shifts and always remains the same

2. Begin with the Keynesian model in equilibrium. The American Recovery and Reinvestment Act resulted in reduced tax rates and increases in government spending. If tax rates decrease and government spending increases, then what would happen to the planned aggregate expenditure (PAE) function?

The PAE function would shift upward

The PAE function would shift downward

The PAE function would not change

3. At higher real interest rates, planned investment ___________. At lower real interest rates, planned investment _______________.

increases, increases

increases, decreases

decreases, increases

decreases, decreases

4. The consumption function is ____________ sloping.

upward

downward

vertical

horizontal

5. Keynesian macroeconomics assumes that prices are _________ in the short-run, but _________ in the long-run.

flexible, flexible

flexible, fixed

fixed, flexible

fixed, fixed

6. An expansionary gap occurs when actual output is _______ than potential output, while a recessionary gap occurs when actual output is _________ than potential output.

greater, greater

greater, less

less, greater

less, less

7. If the output gap is zero, then what must be true about cyclical unemployment?

Cyclical unemployment is positive.

Cyclical unemployment is negative.

Cyclical unemployment is zero.

8. Begin with the Keynesian model in equilibrium. The American Recovery and Reinvestment Act resulted in reduced tax rates and increases in government spending. If tax rates decrease and government spending increases, then what would happen to planned aggregate expenditures?

Planned aggregate expenditures would increase

Planned aggregate expenditures would decrease

Planned aggregate expenditures would not change.

Q2.

Question 84 (1 point) In the aftermath of the global financial crisis, it is generally accepted that record on Wall Street played a significant role. ( 1) high levels of leverage O 2) low levels of liabilities 3) low levels of leverage 4) government intervention ( 5) high levels of liabilitiesQuestion 83 (1 point) The curves are both vertical. ( 1) short-run aggregate supply and short-run Phillips 2) money demand and short-run aggregate supply 3) long-run aggregate supply and short-run Phillips (4) long-run aggregate supply and long-run Phillips 5) aggregate demand and short-run Phillips