Macroeconomics Quiz # 5

Activities undertaken to create new products and processes that will lead to technological progress is research and development

True

False

Bonds are obligations issued by the corporation that promise the holder to receive fixed annual interest payments and payment of the principal upon maturity

True

False

Residual claimants of corporate resources who receive a proportion of profits based upon the ratio of shares held is called

Preferred stock

Common stock

Main stock

All of these

The theory that government borrowing drives up the interest rate, lowering consumption by households and investment spending by firms is called

Multiplier effect

Crowding out effect

Single effect

None of these

A stock that pays fixed, regular dividend payments that do not vary with the profits of the corporation is called

Preferred stock

Common stock

Main stock

All of these

The practice of using corporate profits for capital investment rather than dividend payouts is called

Positive earnings

Retaining earnings

Negative earnings

All of these

Stocks and bonds are securities

True

False

Entities that hold shares of stock in a corporation are called

Business man

Stakeholders

Demanders

All of these

The total demand for all the final goods and services in the economy is called

Aggregate demand

Aggregate curve

Aggregate line

All of these

Aggregate demand graph that shows the ____ relationship between the price level and RGDP demanded

Direct

Inverse

Constant

Variation

The total quantity of final goods and services suppliers are willing and able to supply at a given price level is called

Aggregate demand

Aggregate curve

Aggregate line

Aggregate supply curve

Cost push inflation is price-level ____ due to a negative supply shock

Positive

Negative

Constant

Change

Demand pull inflation is price-level increase due to an ___ in aggregate demand

Increase

Decrease

Constant

All of these

The ____ gap that occurs when the actual output is greater than the potential output is called inflationary gap

Input

Output

Line

Proper

Long run aggregate supply curve is the graphical relationship between RGDP and the price level when output prices and input prices can fully adjust to economic changes

True

False

The difference between the value of exports and the value of imports is called

Gross exports

Net exports

Main exports

Total exports

A type of model that includes international trade effects is ___ economy

Open

Closed

Proper

Positive

The output gap that occurs when the actual output is ___ than the potential output is recessionary gap

Less

Greater

Equal

Zero

Short run aggregate supply curve is the graphical relationship between RGDP and the price level when output prices can change but input prices are unable to adjust

True

False

A situation in which lower growth and higher prices occur together is called

Inflation

Stagflation

Aggregation

None of these

Unexpected temporary events that can either increase or decrease aggregate supply is called

Extra shocks

Supply shocks

Positive shocks

Negative shocks

Wage and price inflexibility is the tendency for prices and wages to only adjust ____downward to changes in the economy

Quickly

Slowly

Mainly

None of these

Autonomous determinants of consumption expenditures not dependent on the level of current disposable income that can result from factors such as real wealth, the Interest rate, household debt, expectations, and tastes and preferences

True

False

The multiplier that only considers the impact of consumption changes on aggregate expenditures is known as expenditure multiplier

True

False

Marginal propensity to consume is additional consumption that results from an additional dollar of income

True

False

Marginal propensity to save is the ____ saving that results from an additional dollar of income

Additional

Subtraction

Positive

All of these

Unplanned inventory investment changes in inventories that firms did not anticipate.

True

False

Automatic stabilizers changes in government transfer payments or tax collections that automatically help counter business cycle fluctuations

True

False

The discretionary, or deliberate, use of government purchases and taxes to alter equilibrium output and prices to stabilize the economy is fiscal policy

True

False

A chain reaction of additional income and purchases that results in total purchases that are greater than the initial increase in purchases is called

Single effect

Multiplier effect

Positive effect

Negative effect