Archives: Quiz
Chapter 22 The arguments of Friedman and Phelps would suggest that other things
The Short-Run Trade-off between Inflation and Unemployment 8645 57. The arguments of Friedman and Phelps would suggest that other things the same, a country that pursues a disinflationary policy that the public does not find completely credible a. should not […]
Chapter 22 Typical estimates of the sacrifice ratio suggest that a one-percentage
The Short-Run Trade-off between Inflation and Unemployment 8625 16. Typical estimates of the sacrifice ratio suggest that a one-percentage-point reduction in the inflation rate requires a. a sacrifice of 5 percent of annual output. b. a sacrifice of 5 percent […]
Chapter 22 Which of the following would cause the price level to rise and output
The Short-Run Trade-off between Inflation and Unemployment 8605 33. A favorable supply shock will cause a. unemployment to rise and the short–run Phillips curve to shift right. b. unemployment to rise and the short-run Phillips curve to shift left. c. […]
Chapter 22 Which The Following Events Could Explain The
The Short-Run Trade-off between Inflation and Unemployment 8585 155. The long–run Phillips curve would shift to the left if a. the money supply growth rate increased or labor markets become more flexible. b. the money supply growth rate increased but […]
Chapter 22 Which of the following would be lower in the long run
The Short-Run Trade-off between Inflation and Unemployment 8565 114. In the long run, a decrease in the money supply growth rate a. shifts the short-run Phillips curve left so inflation returns to its original rate. b. shifts the short-run Phillips […]
Chapter 22 Samuelson And Solow d All The Above Are
The Short-Run Trade-off between Inflation and Unemployment 8545 71. Refer to Figure 35-7. Starting from C and 3, in the long run, an increase in money supply growth moves the economy to a. A and 1. b. back to C […]
Chapter 22 Which of the following would we not expect if government policy moved
The Short-Run Trade-off between Inflation and Unemployment 8485 33. In the long run, policy that changes aggregate demand changes a. both unemployment and the price level. b. neither unemployment nor the price level. c. only unemployment. d. only the price […]
Chapter 22 While the inflation rate depends primarily upon government spending
The Short–Run Trade-off between Inflation and Unemployment Multiple Choice – Section 00: Introduction 1. Closely watched indicators such as the inflation rate and unemployment are released each month by the a. Bureau of the Budget. b. Bureau of Labor Statistics. […]
Chapter 21 If the Federal Reserve’s goal is to stabilize aggregate demand,
22. If the Federal Reserve’s goal is to stabilize aggregate demand, then in response to an increase in money demand, the Federal Reserve will _____ the money supply. 23. To stabilize output, the Federal Reserve will the money supply when […]
Chapter 21 Explain the logic according to liquidity preference theory by which
51. Explain the logic according to liquidity preference theory by which an increase in the money supply changes the aggregate demand curve. 52. How does a reduction in the money supply by the Fed make owning stocks less attractive? ANSWER: […]
Chapter 21 Fiscal policy affects the economy in the short run while monetary
69. According to a 2009 article in The Economist, the multiplier effect and crowding-out effect would exactly offset each other when the economy is a. operating at full capacity. b. in recession. c. experiencing zero inflation. d. experiencing high rates […]
Chapter 21 The aggregate-demand curve could shift from AD1 to AD2 as a result
Figure 34-7 31. Refer to Figure 34-7. The aggregate-demand curve could shift from AD1 to AD2 as a result of a. an increase in government purchases. b. a decrease in net exports. c. households saving a smaller fraction of their […]
Chapter 21 Don’t You Remember Your Economics 101 a Dwight
112. If Congress increases taxes to balance the federal budget, then to prevent unemployment and a recession the Fed will a. reduce interest rates by increasing the money supply. b. increase interest rates by decreasing the money supply. c. increase […]
Chapter 21 The Actual MPC Was Larger Than The
71. If the MPC is 0, then the multiplier is a. 0. b. 1. c. infinite. d. None of the above is correct. 72. As the MPC gets close to 1, the value of the multiplier approaches a. 0. b. […]
Chapter 21 Which of the following events shifts aggregate demand rightward
Figure 34-6. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs. 31. Refer […]
Chapter 21 Economists who are skeptical about the relevance of “liquidity traps”
194. The Fed can influence the money supply by a. changing how much it lends to banks. b. changing the interest rate it pays banks on the reserves they are holding. c. using open-market operations. d. All of the above […]
Chapter 21 The Fed is concerned about stock market booms because the booms
155. The Fed is concerned about stock market booms because the booms a. increase consumption spending. b. increase investment spending. c. increase both consumption and investment spending. d. None of the above is correct. 156. Which of the following actions […]
Chapter 21 Which of the following shifts aggregate demand to the right
113. According to liquidity preference theory, an increase in the price level shifts the a. money demand curve rightward, so the interest rate increases. b. money demand curve rightward, so the interest rate decreases. c. money demand curve leftward, so […]
Chapter 21 People Might Withdraw Money From Interest bearing
71. Refer to Figure 34-2. Assume the money market is always in equilibrium, and suppose r1 = 0.08; r2 = 0.12; Y1 = 13,000; Y2 = 10,000; P1 = 1.0; and P2 = 1.2. Which of the following statements is […]
Chapter 21 Which of the following Fed actions would both decrease the money supply
34. According to liquidity preference theory, the money–supply curve is a. upward sloping. b. downward sloping. c. vertical. d. horizontal. 35. According to liquidity preference theory, the money-supply curve would shift rightward a. if the money demand curve shifted right. […]
Chapter 21 With respect to their impact on aggregate demand for the U.S. economy
The Influence of Monetary and Fiscal Policy on Aggregate Demand Multiple Choice – Section 00: Introduction 1. Shifts in the aggregate-demand curve can cause fluctuations in a. neither the level of output nor the level of prices. b. the level […]
Chapter 20 Demand And Aggregate Supply 65 When The Dollar
Aggregate Demand and Aggregate Supply 61 45. Other things the same, when the price level falls, interest rates a. rise, which means consumers will want to spend more on homebuilding. b. rise, which means consumers will want to spend less […]
Chapter 20 The aggregate-demand curve shows that a decrease in the price level
Aggregate Demand and Aggregate Supply 41 40. The model of aggregate demand and aggregate supply a. is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution of resources between […]
Chapter 20 This Inconsistent With Monetary Neutrality Because a Monetary
Aggregate Demand and Aggregate Supply 21 33. Which of the following is correct concerning recessions? a. They come at fairly regular and predictable intervals. b. They are associated with comparatively large increases in investment spending. c. They are any period […]
Chapter 20 Which of the following explains why production rises in most years
Aggregate Demand and Aggregate Supply Multiple Choice – Section 00: Introduction 1. Which of the following explains why production rises in most years? a. increases in the labor force b. increases in the capital stock c. advances in technological knowledge […]
Chapter 20 Misperceptions theory helps explain what feature of the aggregate demand
Aggregate Demand and Aggregate Supply 255 21. Misperceptions theory helps explain what feature of the aggregate demand and aggregate supply model? 22. Identify the variables that could cause shifts in both the short–run and long–run aggregate-supply curves. ANSWER: labor, capital, […]
Chapter 20 Stagflation results from continued decreases in aggregate demand
Aggregate Demand and Aggregate Supply 241 54. Stagflation results from continued decreases in aggregate demand. a. True b. False 55. If the central bank increased the money supply in response to a decrease in short-run aggregate supply, unemployment would return […]
Chapter 20 Keynes explained that recessions and depressions occur because
Aggregate Demand and Aggregate Supply 221 120. According to the “In the News” article, macroprudential tools a. allow a central bank to alter lending for specific industries. b. allow a central bank to alter taxes. c. limit a central bank’s […]
Chapter 20 Which of the following would cause stagflation
Aggregate Demand and Aggregate Supply 201 82. Which of the following would cause stagflation? a. aggregate demand shifts right b. aggregate demand shifts left c. aggregate supply shifts right d. aggregate supply shifts left 83. Which of the following would […]
Chapter 20 This Increase Wages Shifts The short run Aggregate Supply
Aggregate Demand and Aggregate Supply 181 42. Refer to Optimism. In the long run, the change in price expectations created by optimism shifts a. long–run aggregate supply right. b. long–run aggregate supply left. c. short-run aggregate supply right. d. short-run […]
Chapter 20 Which of the following would cause prices and real GDP to rise
Aggregate Demand and Aggregate Supply 161 6. Which of the following would cause prices and real GDP to rise in the short run? a. an increase in the expected price level b. an increase in the money supply c. a […]
Chapter 20 When the actual change in the price level differs from its expected change
Aggregate Demand and Aggregate Supply 141 63. Other things the same, if the price level is lower than expected, then some firms believe that the relative price of what they produce has a. decreased, so they increase production. b. decreased, […]
Chapter 20 A candidate for political office announces the following policies which
Aggregate Demand and Aggregate Supply 121 22. A candidate for political office announces the following policies which, he says, economics clearly demonstrates will lead to higher output in the long run: 1. increase immigration from abroad 2. make trade more […]
Chapter 20 If countries that imported goods and services from the United States
Aggregate Demand and Aggregate Supply 101 131. If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would a. rise, making aggregate demand shift right. b. rise, making aggregate […]
Chapter 20 Which of the following both shift aggregate demand left
Aggregate Demand and Aggregate Supply 81 91. Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to a. decrease consumption, shown as a movement to the left along a given aggregate-demand curve. […]
Chapter 19 Which Direction Does Shift since The Budget Deficit
16. In the market for foreign-currency exchange, the source of the supply of dollars is _________. The supply curve is _________ because _____________. 17. If the exchange rate rises, domestic goods become relatively ______ expensive. This change in the affordability […]
Chapter 19 Since Net Capital Outflow Must equal Net Exports
42. In the long run import quotas do not affect the size of net exports. a. True b. False 43. An import quota imposed by the U.S. would reduce U.S. imports, but have no impact on U.S. exports. a. True […]
Chapter 19 Which of the following would do the most to reduce a trade deficit
162. Which of the following will decrease U.S. net capital outflow? a. capital flight from the United States b. the government budget deficit increases c. the U.S. imposes import quotas d. None of the above is correct. 163. Which of […]
Chapter 19 A large and sudden movement of funds out of a country is called
112. A large and sudden movement of funds out of a country is called a. arbitrage. b. capital flight. c. crowding out. d. capital mobility. 113. Capital flight refers to a. the movement of workers across international borders in response […]
Chapter 19 A limit on the quantity of a good produced abroad that can
63. Refer to Figure 32-5. Starting from 3% and .75, an increase in the government budget surplus can be illustrated as a move to a. 4% and 1 b. 4% and .5 c. 2% and 1 d. 2% and .5 […]
Chapter 19 A decrease in the budget deficit causes domestic interest rates
13. A decrease in the budget deficit causes domestic interest rates a. and investment to rise. b. to rise and investment to fall. c. to fall and investment to rise. d. and investment to fall. 14. An increase in the […]
Chapter 19 Which of the following increases net capital outflow
8. In the open-economy macroeconomic model, which of the following increases net capital outflow? a. a fall in the real exchange rate, but not a fall in the real interest rate b. a fall in the real interest rate, but […]
Chapter 19 The Open economy Macroeconomic Model Net Capital
98. In the open-economy macroeconomic model, if net capital outflow increases then a. the demand for dollars in the market for foreign-currency exchange shifts right. b. the demand for dollars in the market for foreign-currency exchange shifts left. c. the […]
Chapter 19 Which increases the quantity of loanable funds demanded
47. If interest rates rise in the U.S., then other things the same a. foreigners would buy more U.S. bonds which increases the quantity of loanable funds demanded in the U.S. b. foreigners would buy more U.S. bonds which reduces […]
Chapter 19 Many U.S. business leaders argue that the current state of U.S
A Macroeconomic Theory of the Open Economy Multiple Choice – Section 00: Introduction 1. Over the past three decades, the United States has a. generally had, or been very near to a trade balance. b. had trade deficits in about […]
Chapter 18 Jason plans to buy shrimp in Florida and sell them in Manhattan
Open-Economy Macroeconomics: Basic Concepts 7733 33. To increase domestic investment, a country must increase its saving. a. True b. False 34. The increase in the trade deficit in the 1980’s reflected a decrease in national saving that is associated with […]
Chapter 18 If prices in the United States increase by a smaller percentage than
Open-Economy Macroeconomics: Basic Concepts 7713 71. If the Kenyan nominal exchange rate declines, and prices are unchanged in Kenya and abroad, then the Kenyan real exchange rate a. does not change. b. rises. c. declines d. None of the above […]
Chapter 18 If Chileans buy more U.S. stocks and bonds and U.S. residents
Open-Economy Macroeconomics: Basic Concepts 7593 104. A Japanese bank buys U.S. government bonds, this purchase a. increases U.S. net capital outflow and has no affect on Japanese net capital outflow. b. increases U.S. net capital outflow and increases Japanese net […]
Chapter 18 The Us Has Trade Deficit 100 Billion d
Open-Economy Macroeconomics: Basic Concepts Multiple Choice – Section 00: Introduction 1. Which type(s) of economies interact with other economies? a. only closed economies b. only open economies c. closed economies and open economies d. neither closed nor open economies 2. […]
Chapter 17 You respectfully Tell Your Grandfather That Committing The
19. The quantity equation is expressed as _____. The rate at which money changes hands is known as _____. 20. If velocity is 6, real output is 10,000, and M is 20,000 what would the price level be? If M […]