Question

Two fundamental problems that often arise in answering a macroeconomic question are: Hidden biathe ADE curve will be perfectly flat. the ADE curve will be perfectly vertical.

ses that keep one from honestly weighing arguments, and problems that restrict access to sufficient data. Confusion over how to sort out conflicting arguments and evidence, and working with flawed models. Hidden biases and a lack of intellectual courage. Hidden biases that keep one from honestly weighing arguments and evidence, and confusion over how to sort out conflicting arguments and evidence.

Question 2 5 pts Intellectual courage in a macroeconomic context is: the willingness to fairly assess material that we haven’t previously thought about seriously despite a strong negative reaction to that material. valuable when one has strongly held beliefs about the macroeconomy. being aware of any potential conflicts that might compromise the critical-thinking process and bring those conflicts into that same critical-thinking process. all of the above.

Question 3 5 pts A useful method for sorting through a complex issue when sources conflict is: break the issue into smaller, more manageable subissues. use a matrix to present the conflicts in a clearer manner. both of the above. none of the above.

Question 4 5 pts Which of the following is not a standard for evaluating conflicting claims: Simplicity Relevancy Logicalness Clarity

Question 5 5 pts In terms of the ASR/ADE model, if one believes that the Classical Macroeconomic Model is the best explanation for how the macroeconomy functions: The ASR curve will be perfectly flat. The ASR curve will be perfectly vertical. The ADE curve will be perfectly flat. The ADE curve will be perfectly vertical.

Question 6 5 pts In terms of the ASR/ADE model, if one believes that the Keynesian Model is the best explanation for how the macroeconomy functions: the ASR curve will be perfectly flat. the ASR curve will be perfectly vertical.Question 7 5 pts Which curve in the ASR/ADE model essentially embodies the Phillips Curve? the Fed Reaction Rule the investment curve the ADE curve the ASR curve

Question 8 5 pts Using the ASR/ADE Model, suppose that GDP is below full-employment GDP and inflation is below the targeted inflation rate. In that case, a possible, desirable macroeconomic policy would focus on: generating a positive supply shock. shifting the ADE curve to the right. cutting taxes. All of the above.

Question 9 5 pts Using the ASR/ADE Model, suppose that GDP is above full-employment GDP and inflation is above the targeted inflation rate. In that case, a possible, desirable macroeconomic policy would focus on: generating a positive supply shock. shifting the ADE curve to the right. cutting taxes. All of the above.

Question 10 5 pts Using the ASR/ADE Model, suppose that GDP is below full-employment GDP and inflation is above the targeted inflation rate. In that case, a possible, desirable macroeconomic policy would focus on: raising taxes. shifting the ADE curve to the right. stimulatory monetary policy. None of the above.

Question 11 5 pts Using the ASR/ADE Model, suppose that GDP is above full-employment GDP and inflation is below the targeted inflation rate. In that case, a possible, desirable macroeconomic policy would focus on: generating a positive supply shock. shifting the ADE curve to the right. cutting taxes. None of the above.

Question 12 5 pts Using the ASR/ADE Model, suppose that GDP is below full-employment GDP and inflation is below the targeted inflation rate. In that case, a possible, desirable macroeconomic policy would be to adopt: a stimulatory fiscal policy. a stimulatory monetary policy. either of the above. None of the above.

Question 13 5 pts Using the ASR/ADE Model, suppose that GDP is above full-employment GDP and inflation is above the targeted inflation rate. In that case, a possible, desirable macroeconomic policy would focus on: a stimulatory fiscal policy. a stimulatory monetary policy. either of the above. None of the above.

Question 14 5 pts Using the ASR/ADE Model, what is a potential problem with a positive supply shock? It drives inflation down, possibly below the ideal level. It increases employment and drives the inflation rate up. It makes it harder for businesses to compete. It results in a loss of jobs to foreign countries.

Question 15 5 pts In terms of the ASR/ADE Model, fiscal policy: shifts the ASR curve. shifts the ADE curve. both of the above. none of the above.

Question 16 5 pts In terms of the ASR/ADE Model, monetary policy: shifts the ASR curve. shifts the ADE curve. both of the above. none of the above. Flag this

Question 17 5 pts In terms of the ASR/ADE Model, if the Fed decides that the ideal inflation rate should be higher: it will take actions that will shift the ASR curve vertically up. it will reduce the money supply to drive interest rates up. it will take actions that shift the ADE curve vertically up. none of the above.

Question 18 5 pts In terms of the ASR/ADE Model, if the nation is already at full employment and exports go up: GDP will fall. Inflation will rise. The ASR curve will shift to the right. Inflation will fall.

Question 19 5 pts In terms of the ASR/ADE Model, if business becomes more optimistic (that is, their animal spirits rise): GDP will fall. The ASR curve will shift to the right. Inflation will fall. the ADE curve will shift to the right.*

Question 20 5 pts In terms of the ASR/ADE Model, if there is an economic depression, which of the following would help get the economy back to full employment: a rise in business optimism. an increase in government spending. a rise in the money supply. all of the above.