Few economics questions (macroeconomics)?

N

Niman

New member
1) According to Say's law
a) the production function defines the total demand for goods and services.
b) money is neutral with respect to the real sector of the economy.
c) the economy will never suffer from unemployment or underconsumption.
d) the economy will suffer from underemployment when total spending is insufficient to justify production at full employment.
I think the answer is a here.

2) While both monetarists and Keynesians view the aggregate demand curve as downward-sloping, monetarists argue that
a) a change in the quantity of money is the primary factor causing the aggregate demand curve to shift.
b) changes in government spending and taxes, in addition to changes in the money supply, cause the aggregate demand curve to shift.
c) changes in government spending and taxes are the only factors causing the aggregate demand curve to shift.
d) a change in the quantity of money will have no effect on the aggregate demand curve.
I'm pretty sure the the answer is a here as well.

3) In the macroeconomic long run,
a) output always is above potential GDP.
b) there is full employment and real GDP is equal to potential GDP.
c) there is full employment with no unemployment.
d) GDP always is below potential GDP.
I think d is the only one that makes sense here.

-Thanks for any help.
 
1) Say's law in its most simplest of definitions states that 'supply creates its own demand'. This means that the act of producing something creates wages for people which they then go and spend on other goods. As this is not any of your answers I would guess C is the correct one but I would seek out further information if I was you.

2) An increase in the money supply provides more money for people to spend shifting the Aggregate Demand curve. It's A or B but I'd go with A.

3) C
 
1) Say's law in its most simplest of definitions states that 'supply creates its own demand'. This means that the act of producing something creates wages for people which they then go and spend on other goods. As this is not any of your answers I would guess C is the correct one but I would seek out further information if I was you.

2) An increase in the money supply provides more money for people to spend shifting the Aggregate Demand curve. It's A or B but I'd go with A.

3) C
 
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