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[jarel]

21. (Points: 1)
In terms of Long run model/Classical school of Macroeconomics which of the following are Basic beliefs. Mark all correct answers.

1. Any deviations from full employment will tend to be minor, temporary, and self-correcting
2. Aggregate Demand creates its own Aggregate Supply
3. The government needs to be the spender of last resort
4. Mostly economies are at or very close to Full Employment level of real GDP
5. Macroeconomy will generate and maintain full employment without any government intervention
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22. (Points: 1)
Say’s Law is often stated as;

a. “the economy is always, and everywhere, in equilibrium!”
b. “in the Short-Run we are all consumers.”
c. “the Long-Run is a series of short-cuts.”
d. “Supply creates its own Demand.”
e. “Demand creates its own Supply.”
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23. (Points: 1)
Which of the graphs below illustrates Classical/LR Macroeconomic theory of the curing of an Inflationary gap?


a. A
b. B
c. C
d. D
e. None of the above do
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24. (Points: 1)
In terms of the Classical/LR Macroeconomic theory of the curing of an Inflationary Gap(illustrated above), in order for this to happen:

a. Wages and Prices will rise, Decreasing Firm's profits, which will Decrease SRAS till get back to Full Employment, with Inflationary gap eliminated
b. Incomes will rise, Increasing Household Wealth, which will Increase Aggregate Demand till get back to Full Employment with Inflationary gap eliminated
c. The Government will Decrease Government spending, and/or Increase Taxes, to Decrease Aggregate Demand until get back to Full Employment with Inflationary gap eliminated
d. Wages and Prices will fall, Increasing Firm's profits, which will Increase SRAS till get back to Full Employment, with Inflationary gap eliminated
e. The Government will Increase Government spending, and/or Decrease Taxes, to Increase Aggregate Demand until get back to Full Employment with Inflationary gap eliminated
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25. (Points: 1)
In terms of the Inflationary gap in the above question, in order to eliminate this gap the Real GDP must __________.

a. Real GDP does not need to change only the Price Level does
b. Increase by $3 tn
c. Decline by $3 tn
d. Increase by $2 tn
e. Decline by $2 tn
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26. (Points: 1)
An Inflationary gap means the Macroeconomy is _______ and the major Macroeconomic problem is _________

a. "Overheating" -- Inflation
b. "Underperforming" -- Inflation
c. "Underperforming" -- Unemployment
d. At LR equilibrium -- No Problem
e. "Overheating" -- Unemployment
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27. (Points: 1)
According to the Classical school of Macroeconomics, if we have an Underperforming economy what will follow?

a. 1. The Government decreases Government spending 2. AD decreases 3. Government keeps decreasing AD till reach LRAS
b. 1. Unemployment leads to Falling Wages and Prices; leads to 2. Higher Profits for firms; leads to 3. An Increase in SRAS (keeps shifting right till reach LRAS)
c. 1. Falling Profits; leads to 2. Lower output for firms; leads to 3. A Decrease in SRAS (keeps shifting left till reach LRAS)
d. 1. The Government increases Government spending 2. AD increases 3. Government keeps increasing AD till reach LRAS
e. 1. Inflation leads to Rising Wages and Prices; leads to 2. Lower Profits for firms; leads to 3. A Decrease in SRAS (keeps shifting left till reach LRAS)
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28. (Points: 1)
John (Maynard) Keynes most famous saying (aphorism) is that:

1. “In the Long-run, we are all dead.”
2. “Markets always work, so let them!”
3. “The Great Depression was but a slight distraction from the hounds of prosperity that the roaring twenties unleashed on the World Economy.”
4. “Unto each according to their need, from each according to their ability.”
5. “We should always be aware of our own mortality, spend accordingly.”
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29. (Points: 1)
Keynes's famous saying from the question above means that:

a. Household Consumption is the center of Macroeconomics
b. Government intervention in the Macroeconomy will do more harm than good
c. We need Macroeconomic theory to not be distracted by the Great Depression, from the efficient self-adjusting nature of the Macroeconomy in the Long-Run
d. We need an aggressive approach to Government economic policy that attacks and cures Macroeconomic problems quickly and effectively in the Short-Run
e. A Communist reform was urgently needed for the Long-run health of the US economy
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30. (Points: 1)
The reason that the Classical model believes the SRAS always shifts in order to drive the economy back to Full Employment in the LR is because of:

a. Government Intervention
b. Price and Wage flexibility
c. Say's Law
d. The SRAS doesn’t shi

[emmanuil54]

Sigh .. another kid asking for CHEATING not HELP.
I suggest using the material provided by your on line school to help you answer your TEST questions.
We can HELP by correcting your work IF you show a good faith effort.