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Column A AColumn B BColumn C CColumn D DColumn E E Column F

A 100

Draw the regular D and S graph. Draw a dot showing a decrease in P and a decrease in Q Figure out what could have caused that by drawing in the lines. Decrease in demand and no change in supply A 100

A 200

If the budget deficit increases—(more spending than taxes in a given year) it will increase the gov.’s demand for loans. If the gov., increases demand for loans, IR will increase. A 200

1.Suppose that in an economy with lump- sum (disregard) taxes, autonomous (disregard) investment spending increases by $10 million. If the marginal propensity to consume is 0.8, equilibrium gross domestic product will change by a maximum of: 2.New scenario, taxes decrease by the same amount assuming the same MPC A 300

1.Spending multiplier: 1/MPS 1/.2=5 5 * positive 10 million= 50 million increase 2.Tax multiplier: -MPC/MPS -.8/.2= * negative (decrease) $10 million= 40 million increase A 300

A 400

A-D will increase the productivity of labor. Just because the labor force increases does not necessarily mean that they will be more productive. However, all A-E would shift the PPC outward and the LRAS to the right. Why? They are all an increase in resources. A 400

A 500

MPC is the change in spending brought by a change in income. If income increases by 10,000 and the MPC is point.8, then consumption will increase by 8,000 A 500

B 100

Most of you know that inside is inefficient or unemployment, on the line is (productively efficient, and outside is currently unattainable. Missed on last test—only one point of the curve represents the best mix of goods. B 100

B 200

If set at a balanced budget at full employment, then—deficit during recession (more spending, less taxes) and surplus during inflation B 200

B 300

C

B 400

If a decrease in exports, the AD will decrease. Find a FISCAL POLICY that will increase AD.-- B B 400

B 500

C

C 100

D

C 200

E

C 300

Best answer is C. Choice A could increase economic growth b/c an increase in population is an increase in resources, but would probably not increase per capita RGDP, which is the best measure of the standard of living. C 300

DAILY DOUBLE C 400 DAILY DOUBLE Place A Wager

C 400

B

C 500

MPC is.9 Then, MPS is.1 Gov spending increases by $100, but exports decrease by $60. So, $40 injection. 1/.1=10 10 x 40=400--B C 500

D 100

A

D 200

C

D 300

D

D 400

B

D 500

Down the Phillips Curve=decrease in AD B D 500

E 100

E Talk about LRAS, LRPC, and PPC E 100

E 200

Correct Response Two E E 200

Question Number Three E E 300

B

Question Number Four E E 400

SRAS decreases--A E 400

E 500

A

F 100

D

F 200

C

F 300 Draw crowding out. 1.Show an economy in a recession in one color. 2.After expansionary fp, what happens to AD/ 3.Due to expansionary FP, what happens to the budget? 4.Draw the loanable funds graph. What happens as a result of #3. What happened to the RIR? 5.What will happen to interest-sensitive consumption spending and businesses’ purchase of capital goods (AD)? 6.What will happen to long-run growth?

F 300

F Draw an economy in full employment equilibrium. 2.Businesses’ inflationary expectations increase. What happens to SRAS? 3.What happened to inflation? 4.What happened to REAL wages? Take note--In the SR—nominal wages stay the same (unless other wise stated). 5.After #2, show the change in the Phillips Curve

F 400

F Does unanticipated inflation help net creditors or net debtors? EXPLAIN. Net—after subtracting EX. My husband and I owe $100,000 on our student loans and $140,000 on our house. If we have $10,000 in savings (our saving are loaned out to others), then we are NET DEBTORS by $230,000.

F 500

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