Question 1

Among economists,there is a consensus that the recovery from the Great Depression was due to

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The answer of Among economists,there is a consensus that the...

Question 2

Between 1929 and 1933 real GDP declined

Accepted Answer

Between 1929 and 1933, during the Great Depression, the real GDP of the United States declined by approximately 35 percent.

Question 3

Discuss the difference in the short-run and long-run effects of a decrease in government purchases and a monetary policy change designed to lower inflation.Comment specifically on the four components of aggregate demand,interest rates,and inflation.

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Question 4

A price shock is

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The answer of A price shock is
...

Question 5

An increase in the target inflation rate by the central bank is referred to as

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"Reinflation" refers to an increase in the target inflation rate set by the central bank.

Question 6

Why is the Great Depression,even though it occurred over 70 years ago,a valid topic in macroeconomics?
What explanations are offered as to what caused the Great Depression?
What caused the end of the Great Depression?

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The answer of Why is the Great Depression,even though it...

Question 7

The inflationary experience of the United States during the 1970s can be interpreted as a time when the Fed increased the target rate of inflation.

Accepted Answer

During the 1970s, the Fed increased the target rate of inflation in order to combat high unemployment and stimulate economic growth. This resulted in a period of high inflation and economic instability.

Question 8

A price shock occurs when

Accepted Answer

A price shock occurs when key commodity prices change. This can be caused by a variety of factors such as natural disasters, geopolitical events, changes in supply and demand, and changes in production costs. It can have a significant impact on the economy, leading to inflation or deflation depending on the direction of the shock.

Question 9

Among economists,

Accepted Answer

There is more disagreement among economists about what caused the Great Depression than about what brought about the recovery from it.

Question 10

Over the past 25 years,price shocks have occurred due to sharp changes in

Accepted Answer

Over the past 25 years, there have been significant price shocks in the global economy due to sharp changes in oil prices, such as during the Gulf War, the 2008 financial crisis, and the COVID-19 pandemic. While there have been fluctuations in other commodity prices and interest rates during this time, they have not caused the same level of widespread impact as oil price shocks.

Question 11

Which of the following is the most appropriate explanation of a supply shock?

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Question 12

Explain what effect a monetary policy designed to bring about disinflation would have on the economy.Be sure to discuss what happens in the short run,the medium run,and the long run.

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Question 13

In the late 1960s and 1970s inflation decreased around the world.

Accepted Answer

This is not true. In fact, the opposite occurred during this time period - inflation increased around the world. This was due in part to the rising cost of oil, which led to higher prices for goods and services.

Question 14

Graphically show the difference between what is meant by a growth slowdown as opposed to a recession.

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Question 15

A change in the price of a key commodity such as oil,usually because of a shortage,that causes a shift in the inflation adjustment line is known as a

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The answer of A change in the price of a...

Question 16

All of the inflation that occurred in the 1970s can be explained by reinflation policies.

Accepted Answer

While reinflation policies (such as allowing the money supply to expand and increasing government spending) contributed to inflation in the 1970s, they do not fully explain all of the inflation that occurred. Other factors, such as rising oil prices and global economic instability, also played a significant role.

Question 17

Explain why the Fed would ever pursue a policy to cause reinflation.

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Question 18

Which of the following is the most appropriate explanation of a price shock?

Accepted Answer

A price shock refers to a sudden and significant change in the price of a key commodity or input, which can have a disruptive impact on the overall economy. Examples include an oil price shock or a sharp increase in the price of food or raw materials. A price shock can affect inflation, production costs, and consumer behavior, among other factors.

Question 19

Discuss why the Fed may in some cases need to cause a small recession to reduce inflation in the economy.Hint: Think about how firms set their prices.

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Question 20

What is the difference between a temporary growth slowdown and a recession?

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Quiz 25: Using the Economic Fluctuations Model