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Chapter 06 - An Introduction to Macroeconomics
53. Kara's Kittens typically produces and sells at its optimal (lowest per-unit cost) level of 30
scratching posts per week. Kara's also maintains an inventory of 20 scratching posts. If prices
are sticky and there is a positive demand shock this week resulting in demand for 40
scratching posts, we would expect Kara's to:
54. In situations of sticky prices and negative demand shocks we would expect firms to:
Chapter 06 - An Introduction to Macroeconomics
55. Which of the following statements best describes how firms respond to demand shocks
under conditions of inflexible prices?
56. For which of the following goods or services are prices most sticky?
57. For which of the following goods or services are prices least sticky?
Chapter 06 - An Introduction to Macroeconomics
58. The average number of months between price changes for gasoline is:
59. Prices for airline tickets change on average about once per month. This would suggest that
airline ticket prices are:
60. Prices tend to be sticky because:
Chapter 06 - An Introduction to Macroeconomics
61. Which of the following best explains why prices tend to be inflexible even when demand
changes?
62. Prices are particularly sticky:
63. Which of the following statements best describes price flexibility in the economy?
Chapter 06 - An Introduction to Macroeconomics
64. Refer to the above figures. As the economy moves from the very short run to the longer
run, we would expect:
Chapter 06 - An Introduction to Macroeconomics
65. Refer to the above figures. In terms of representing the economy:
66. Refer to the above figures. If government policy can be used to affect the level of demand
in the economy, these figures suggest that government policy:
Chapter 06 - An Introduction to Macroeconomics
67. The overall behavior of the economy:
68. (Consider This) What is the difference between financial investment and economic
investment?
69. (Consider This) Which of the following is an example of economic investment?
Chapter 06 - An Introduction to Macroeconomics
70. (Consider This) Suppose that Toyota buys a factory previous owned by Chrysler Motors.
Economists would:
71. (Consider This) In 2008 and 2009, the United States experienced what has come to be
known as the:
Chapter 06 - An Introduction to Macroeconomics
72. (Consider This) The U.S. recession which occurred in 2008 and 2009 represented a case
where:
73. (Last Word) Many economists believe that the widespread use of computerized inventory
control systems:
Chapter 06 - An Introduction to Macroeconomics
74. (Last Word) Computerized inventory tracking has been credited with reducing the number
and severity of recessions because these tracking systems:
75. (Last Word) Which of the following statements is true about computerized inventory
tracking systems and the severity of recessions?
Chapter 06 - An Introduction to Macroeconomics
76. The business cycle is primarily concerned with changes in the level of overall prices over
time.
77. A sometimes short, sometimes extended period of declining output and living standards is
referred to as a recession.
78. The business cycle reflects both short-run fluctuations in output and long-run economic
growth.
79. Economists and policymakers are generally more concerned about nominal GDP than real
GDP.
