Question :
71) Stagflation defined as a period when real GDP ________ : 1238125
71) Stagflation is defined as a period when real GDP ________ and the price level ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) is constant; rises rapidly
72) A combination of declining real GDP and rising price level is referred to as
A) an expansion.
B) a trough.
C) stagflation.
D) deflation.
E) a depression.
73) Reasons that the recession of 2008-2009 did not become a depression include:
i.The Fed bailed out troubled financial institutions.
ii.The government aggressively balanced its budget.
iii.The government increased its expenditures, which increased aggregate demand.
A) i only
B) ii only
C) iii only
D) i and iii
E) i and ii
74) As a result of OPEC ________ oil prices in 1973 and 1980, real GDP in United States ________.
A) increasing; increased
B) increasing; decreased
C) decreasing; increased
D) decreasing; decreased
E) increasing; did not change
75) Oil price hikes
A) increase aggregate supply.
B) decrease aggregate supply.
C) increase aggregate demand.
D) decrease aggregate demand.
E) increase potential GDP.
76) When OPEC nearly tripled the price of oil in late 1973,
A) U.S. real GDP increased as profits by oil producers increased.
B) U.S. real GDP did not change although the price level rose.
C) the U.S. price level fell because production became too expensive.
D) the U.S. price level rose and real GDP decreased.
E) both U.S. real GDP and the price level increased.
77) At the beginning of 2015, a country is at full-employment. During 2015, oil-producing countries decrease oil production leading to much higher oil prices. The higher oil prices can
A) increase aggregate demand and lead to an expansion.
B) increase aggregate supply and lead to an expansion.
C) decrease aggregate demand and lead to a stagflation.
D) decrease aggregate supply and lead to a stagflation.
E) decrease aggregate demand and lead to a higher price level.
78) Potential GDP increased from 4.7 trillion to 16.6 trillion between 1970 and 2013 resulting in economic growth. Also, during this time ________ occurred because ________.
A) inflation; aggregate demand decreased by more than potential GDP
B) stagflation; aggregate demand increased by more than potential GDP
C) deflation; aggregate demand increased by more than potential GDP
D) inflation; aggregate demand increased by more than potential GDP
E) inflation; aggregate demand increased by less than potential GDP
79) In reality, AD rarely ________; however, the economy performs as though it does when it ________.
A) decreases; fluctuates with potential GDP
B) increases; decreases at a pace much slower than potential GDP
C) stagnates; increases at a pace much faster than potential GDP
D) decreases; increases at a pace much slower than potential GDP
E) decreases; increases at a pace much faster than potential GDP
80) The 2008-2009 recession must have been a result of ________ because otherwise the combination of the ________ cannot be explained.
A) a decrease in AD and an increase in AS; fall in the price level and the decrease in real GDP
B) a decrease in AD and an increase in AS; rise in the price level and the decrease in real GDP
C) an increase in AD and AS; rise in the price level and the decrease in real GDP
D) a decrease in AD and AS; rise in the price level and the decrease in real GDP
E) a decrease in AD and AS; decrease in the price level and the decrease in real GDP
