Question 1

Suppose the United States produced $12 trillion of goods and services in 2005, according to Say's law

Accepted Answer

A)   the economy will produce more than $12 trillion in 2006.
B)   the supply of $12 trillion goods will lead to a general glut of goods if consumer demand falls.
C)   the supply of $12 trillion in goods and services will be matched by $12 trillion in spending.
D)   the economy will be able to save about $1 trillion for future consumption.

Question 2

Explain the relationship of business cycles and Say's law.
-How do these cycles violate Say's law? What would a conservative economist say about how the economy readjusts? Why?

Accepted Answer

The answer of Explain the relationship of business cycles and...

Question 3

Explain Say's law and discuss the arguments supporting it.
-Describe the process that keeps aggregate supply and demand equal.

Accepted Answer

Production of output leads to income for its producers This income must lead to an equal amount of demand or expenditures

Question 4

An economy in which most output is produced for sale on the market is

Accepted Answer

A)   a feudal economy.
B)   a capitalist economy.
C)   a communal economy.
D)   a socialist economy. B

Question 5

List and describe the four functions of money.
-What are the four functions of money? Does it serve all functions equally well? ?Explain.

Accepted Answer

The answer of List and describe the four functions of...

Question 6

Explain the relationship of business cycles and Say's law.
-What are three main characteristics of the capitalist economy that make possible cycles of boom and bust?

Accepted Answer

The answer of Explain the relationship of business cycles and...

Question 7

Whats defention of terms:
-aggregate demand

Accepted Answer

The answer of Whats defention of terms:
-aggregate demand...

Question 8

Whats defention of terms:
-equilibrium

Accepted Answer

The answer of Whats defention of terms:
-equilibrium...

Question 9

Whats defention of terms:
-aggregate supply

Accepted Answer

The answer of Whats defention of terms:
-aggregate supply...

Question 10

During the Roman Empire, there was considerable trade, and most of it was

Accepted Answer

A)   in agricultural goods.
B)   in military goods.
C)   in luxury goods.
D)   in livestock

Question 11

What are the 4 functions of money in a modern economy?

Accepted Answer

A)   store of value, unit of accounting, medium of exchange, standard of deferred payment.
B)   store of value, collector's item, medium of exchange, unit of accounting.
C)   store of value, medium of exchange, standard of deferred payment, emergency reserve.
D)   medium of exchange, standard of deferred payment, unit of accounting, collector's item.

Question 12

Describe how Say's law informs policy decisions about the economy.
-If Say's law holds, should the government try to smooth the effects of a boom and bust? Why or why not?

Accepted Answer

The answer of Describe how Say's law informs policy decisions...

Question 13

Progressive economists such as Wesley Mitchell

Accepted Answer

A)   showed that capitalist economies often do not produce equilibrium but do produce a business cycle with booms and busts.
B)   claimed that the internal workings of market capitalism produce an economy without booms or busts or price inflation that the market could not correct quickly.
C)   claimed that unemployment and inflation are caused by factors external to the economy and are not due to how the economy itself operates.
D)   argued that aggregate demand must always equal aggregate supply at any level of supply.

Question 14

Describe how Say's law informs policy decisions about the economy.
-How is the economy different today from feudalist society that leads to boom and bust?

Accepted Answer

Under feudalism, production was for use of by the manor and not for sale in the market

Question 15

Aggregate supply is defined as

Accepted Answer

A)   the total output that business produces and plans to sell at a given price level.
B)   the total dollar amount of goods and services that consumers, investors, foreigners, and governments plan to buy at a given price level.
C)   the total quantity of goods that sellers would like to sell during a given period, at various prices, holding other things constant.
D)   the total quantity of goods that buyers would like to buy during a given period, at various prices, holding other things constant.

Question 16

Whats defention of terms:
-Say's law

Accepted Answer

The answer of Whats defention of terms:
-Say's law...

Question 17

List and describe the four functions of money.
-How does the use of credit complicate business cycles?

Accepted Answer

The answer of List and describe the four functions of...

Question 18

Capitalist economic institutions were fully developed in England

Accepted Answer

A)   by the end of the 18th century
B)   by the end of the 16th century
C)   by the end of the 17th century
D)   by the end of the 15th century.

Question 19

Aggregate demand is defined as

Accepted Answer

A)   the total dollar amount of goods and services that consumers, investors, foreigners, and governments plan to buy at a given price level.
B)   the total dollar amount of goods and services that business produces and plans to sell at a given price level.
C)   the demand for a materials used in concrete.
D)   the demand for all the various types of goods and services consumed by a household.

Question 20

Which of the following is true of Say's law?

Accepted Answer

A)   there is often a lack of sufficient demand for goods and services.
B)   there can never be excess production above demand for any length of time.
C)   the economy is naturally prone to severe booms and busts.
D)   there is a constant danger of runaway inflation.

Exam 38: Money and Profit Says Law and Institutionalist Criticism

Suppose the United States produced $12 trillion of goods and services in 2005, according to Say's law

Correct AnswerverifiedShow Answer

Explain the relationship of business cycles and Say's law. -How do these cycles violate Say's law? What would a conservative economist say about how the economy readjusts? Why?

Correct AnswerverifiedShow Answer

Explain Say's law and discuss the arguments supporting it. -Describe the process that keeps aggregate supply and demand equal.

Correct AnswerverifiedProduction of output leads to income for its producers This income must lead to an equal amount of demand or expenditures

An economy in which most output is produced for sale on the market is

Correct AnswerverifiedB

List and describe the four functions of money. -What are the four functions of money? Does it serve all functions equally well? ?Explain.

Correct AnswerverifiedShow Answer

Explain the relationship of business cycles and Say's law. -What are three main characteristics of the capitalist economy that make possible cycles of boom and bust?

Correct AnswerverifiedShow Answer

Whats defention of terms: -aggregate demand

Correct AnswerverifiedShow Answer

Whats defention of terms: -equilibrium

Correct AnswerverifiedShow Answer

Whats defention of terms: -aggregate supply

Correct AnswerverifiedShow Answer

During the Roman Empire, there was considerable trade, and most of it was

Correct AnswerverifiedShow Answer

What are the 4 functions of money in a modern economy?

Correct AnswerverifiedShow Answer

Describe how Say's law informs policy decisions about the economy. -If Say's law holds, should the government try to smooth the effects of a boom and bust? Why or why not?

Correct AnswerverifiedShow Answer

Progressive economists such as Wesley Mitchell

Correct AnswerverifiedShow Answer

Describe how Say's law informs policy decisions about the economy. -How is the economy different today from feudalist society that leads to boom and bust?

Correct AnswerverifiedUnder feudalism, production was for use of by the manor and not for sale in the market

Aggregate supply is defined as

Correct AnswerverifiedShow Answer

Whats defention of terms: -Say's law

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List and describe the four functions of money. -How does the use of credit complicate business cycles?

Correct AnswerverifiedShow Answer

Capitalist economic institutions were fully developed in England

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Aggregate demand is defined as

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Which of the following is true of Say's law?

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Production of output leads to income for its producers This income must lead to an equal amount of demand or expenditures

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B

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Under feudalism, production was for use of by the manor and not for sale in the market

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