Week 15 — Quiz · Macroeconomic Schools & Policy Debates

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objectives 1, 5–8 (synthesis) · 10 questions · 10 points · closed to AI · one attempt
Auto-graded (Classic QTI): see F-quiz-week-15-qti.xml for the Canvas import. Every numeric answer is pre-computed; every school-to-claim item tests what each school CLAIMS, never which school is right.

The questions (human-readable; answer key below)

Q1. The Keynesian tradition claims that, in the short run, wages and prices are —
A) Sticky — slow to adjust, so an economy can sit in a recessionary gap B) Perfectly flexible — they clear markets instantly C) Irrelevant to whether the economy is in a recessionary gap D) Only sticky in the labor market, never in product markets

Q2. The classical/monetarist tradition claims that activist stabilization policy is risky mainly because —
A) Government spending is always wasteful B) Policy acts with long and variable lags, so a stimulus can arrive after the recession has already ended C) Prices never adjust, even in the long run D) The Federal Reserve does not have any policy tools

Q3. Meadowland has a national debt of $12 trillion and a GDP of $15 trillion. Its debt-to-GDP ratio is —
A) 12% B) 15% C) 80% D) 125%

Q4. Meadowland's deficit this year is $0.6 trillion. Which statement correctly distinguishes the deficit from the debt?
A) The deficit and the debt are two names for the exact same number B) The deficit is a stock (accumulated total); the debt is a flow (this year's shortfall) C) The deficit is a flow (this year's shortfall); the debt is a stock (the accumulated total) — a deficit adds to the debt D) Running a deficit automatically reduces the debt

Q5. A central bank that commits in advance to a steady, predictable rate of money growth (or a fixed inflation target it will not deviate from case-by-case) is following an approach best described as —
A) Discretion — judging each situation as it comes B) A rule — a pre-committed, predictable policy stance, favored by the classical/monetarist tradition as a way to avoid the risks of mistimed activism C) Fiscal policy, not monetary policy D) Crowding out

Q6. (True/False) Both the Keynesian and classical/monetarist traditions disagree about which body has the authority to conduct fiscal policy versus monetary policy (i.e., they disagree about whether Congress or the Federal Reserve controls each tool). → False

Q7. (True/False) Both the Keynesian and classical/monetarist traditions agree that the long-run Phillips curve is vertical at the natural rate of unemployment. → True

Q8. (Select all that apply.) Which of the following are claims genuinely made by at least one of the two traditions discussed this week — regardless of which one you personally find more persuasive?
☑ A) Active fiscal and monetary stabilization can help close a recessionary gap (Keynesian) ☑ B) Policy rules can outperform case-by-case discretion because of long and variable lags (classical/monetarist) ☐ C) The classical/monetarist tradition is objectively outdated and no longer used by any economist ☑ D) Government borrowing can crowd out private investment (classical/monetarist concern) ☑ E) Prices and wages adjust given enough time, so gaps tend to self-correct (classical/monetarist)

Q9. (Matching) Keynesian → Wages and prices are sticky in the short run, so active stabilization policy can help close a recessionary gap; Classical/monetarist → Prices adjust given time, policy acts with long and variable lags, and rules can outperform discretion; Agreed ground (both schools) → The long-run Phillips curve is vertical, and sustained high inflation is a monetary phenomenon in the long run; Neither school's claim → The debt and the deficit are the same number and can be used interchangeably.

Q10. Meadowland is in a recessionary gap. Which pairing correctly states what each tradition would most likely recommend?
A) Keynesian: do nothing and wait; Classical/monetarist: increase spending immediately B) Keynesian: increase spending and/or cut taxes now to close the gap; Classical/monetarist: be cautious about timing and lean toward rule-based policy or restraint, citing lags and crowding-out risk C) Both traditions recommend the identical policy with no difference in emphasis D) Neither tradition has anything to say about a recessionary gap

Answer key & feedback (instructor)

Quantitative gate: PASS — every numeric answer re-computed: Q3 12/15×100 = 80; Q4 relies on the same 80%/4% pair without re-deriving a new number (correctly distinguishes stock vs. flow).
Graph-logic check: PASS — this week is primarily qualitative (no curve-shift item; the discipline's graph-logic canon carries over from Weeks 5–14 and is recapped, not retested, this week); every school-to-claim item verified against the NUMBERS_PACK W15 canon — Keynesian and classical/monetarist positions each stated at full strength, the agreed-ground item (Q7) correctly separated from the contested items, and no item asks students to declare either school "correct."

Quality gate (self-checked): every single-answer item has exactly one correct option; distractors target the named traps (sticky vs. flexible flipped, rules vs. discretion confused with fiscal vs. monetary, debt/deficit flow-vs-stock reversed, "one school is outdated" false claim). No free numeric entry; no essay.