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AP Macroeconomics Unit 4 Exam
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01/25/2007

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Term
An annually balanced budget intensifies the business cycle because tax revenue declines associated with:
Definition
recession will require cuts in government spending.
Term
The long-run aggregate supply curve is verticle:
Definition
because resource prices evenutally catch up with product prices.
Term
Growth production capacity is shown by:
Definition
both the shift from AB to CD and the shift from X to Y.
Term
A protective tariff will:
Definition
increase the price and sales of domestic consumers.
Term
The velocity of money is the:
Definition
number of times per year the average dollar is spent on final goods and services.
Term
Which is an example of a non-tariff barrier (NTB)?
Definition
box-by-box inspection requirements for imported fruits.
Term
On the basis of the above information:
Definition
Gamma should export tea to Sigma and Sigma should export pots to Gamma.
Term
The amount by which Federal tax revenues exceed Federal government expenditures during a particular year is the:
Definition
budget surplus.
Term
The basic equation of monetarism is:
Definition
MV=PQ
Term
Keynesian Theory is best portrayed by:
Definition
[image]
Term
Classical Theory is best portrayed by:
Definition
[image]
Term
In terms of aggregate supply, a period in which nominal wages and other input prices are variable is called the:
Definition
long run.
Term
In terms of aggregate supply, a period in which nominal wages and other input prices are constant is called the:
Definition
short run.
Term
Labor productivity is defined as:
Definition
total output/worker-hours.
Term
The shifts in long-run and short-run aggregate supplly curves from AS1 and AS'1 to AS2 and AS'2 would most likely result from:
Definition
an improvement in technology.
Term
Functional finance:
Definition
views the public budget primarily as a way to stabilize the economy.
Term
New Classical economists say that a fully anticipated increase in aggregate demand:
Definition
moves the economy up along its vertical long-run aggregate supply curve.
Term
Classical theory sees the aggregate supply curve as being:
Definition
verticle.
Term
The Federal budget deficit is found by:
Definition
subtracting governmetn tax revenues from government spending in a particular year.
Term
In the extended analysis of aggregate supply, the short-run aggregate sup;;y curve is:
Definition
upward sloping andt he long-run aggregate supply curve is verticle
Term
In comparing a tariff and an import quota we find that:
Definition
the tariff gnerates revenue from the U.S. treasury but the quota does not.
Term
The World Trade Organization:
Definition
was established to resolve dispute arising under world trade rules.
Term
Keynesian theory views aggregate supply curve as:
Definition
horizontal.
Term
Economic growth can be portrayed as a:
Definition
outward shift of the production possibilities curve.
Term
Monetarists:
Definition
changes the moeny supply are the primary cause of changes in real output and price level.