AP Macro Unit 3 Vocab
Authored by Rebecca Campbell
Social Studies
12th Grade
Used 136+ times
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15 questions
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1.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Wealth Effect
“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.
Price levels effect purchasing power which effects spending
When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.
Price levels and economy will fix itself. No Government involvement required
When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.
2.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Interest Rate Effect
“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.
Price levels effect purchasing power which effects spending
When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.
Price levels and economy will fix itself. No Government involvement required
When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.
3.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Foreign Trade Effect
“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.
Price levels effect purchasing power which effects spending
When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.
Price levels and economy will fix itself. No Government involvement required
When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.
4.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Classical Theory
“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.
Price levels effect purchasing power which effects spending
When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.
Price levels and economy will fix itself. No Government involvement required
When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.
5.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Keynesian Theory
“Sticky Wages” prevents wages from falling. The government should deficit spend to close the gap.
Price levels effect purchasing power which effects spending
When U.S. price levels rise, then GDP decreases due to an increase in imports and a decrease in exports.
Price levels and economy will fix itself. No Government involvement required
When price levels increase, lenders need to charge higher interest rates which decreases consumer and business investment spending.
6.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Inflationary Gap
Output is low and unemployment is more than NRU. Actual GDP is below potential GDP.
Laws that reduce inflation, decrease GDP (Close an Inflationary Gap) –G or + taxes (- C)
Output is high and unemployment is less than NRU. Actual GDP is above potential GDP.
A gap with higher prices and a decrease in GDP
Laws that reduce unemployment and increase GDP (Close a Recessionary Gap) + G or – taxes (+C)
7.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Recessionary Gap
Output is low and unemployment is more than NRU. Actual GDP is below potential GDP.
Laws that reduce inflation, decrease GDP (Close an Inflationary Gap) –G or + taxes (- C)
Output is high and unemployment is less than NRU. Actual GDP is above potential GDP.
A gap with higher prices and a decrease in GDP
Laws that reduce unemployment and increase GDP (Close a Recessionary Gap) + G or – taxes (+C)
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