Econ Final MC
Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8 percent, and excess reserves amount to $5 billion. What is the level of deposits? A-$ 4,937.5 billion B-$ 5,062.5 billion C-$ 5,000 billion D-$ 4,995 billion
A-$ 4,937.5 billion
If a country had a trade surplus of $50 billion and then its exports rose by $30 billion and its imports rose by $20 billion, its net exports would now be A-$60 billion. B-$40 billion. C-$0 billion. D-$20 billion.
A-$60 Billion
The BLS reports the U-6 measure of labor underutilization. Which of the following is how it computes U-6? A-(total unemployed + marginally attached workers + part time employed for economic reasons)/(labor force + marginally attached workers) B-(total unemployed + marginally attached workers + part-time employed for economic reasons)/adult population C-(total unemployed + marginally attached workers)/(labor force + marginally attached workers) D-(total unemployed + marginally attached workers)/adult population
A-(total unemployed + marginally attached workers + part time employed for economic reasons)/(labor force + marginally attached workers)
If M = 6,000, P = 3, and Y = 3,000, what is velocity? A-1.5 B-6 C-0.67 D-0.167
A-1.5
Refer to figure 35-8 attached. Suppose the economy starts at 5% unemployment and 3% inflation and expected inflation remains at 3%. Which one of the following points could the economy move to in the short run if the Federal Reserve pursues a more expansionary monetary policy? A-3% unemployment and 5% inflation B-7% unemployment and 1% inflation C-3% unemployment and 7% inflation D-7% unemployment and 3% inflation
A-3% unemployment and 5% inflation
Given the following information, what are the values of M1 and M2? A-M1 = $1,350 billion, M2 = $5,600 billion. B-M1 = $1,400 billion, M2 = $6,200 billion. C-M1 = $1,300 billion, M2 = $5,600 billion. D-M1 = $3,150 billion, M2 = $6,200 billion.
A-M1 = $1,350 billion, M2 = $5,600 billion.
Which of the following is not a reason the New York Federal Reserve Bank president always gets to vote at the Federal Open Market Committee meetings? A-New York has higher population than other cities in the US. B-New York is the traditional financial center of the U.S. economy. C-All Fed purchases and sales of bonds go through the New York Fed's trading desk. D-All other answers are reasons.
A-New York has higher population than other cities in the US.
Which of the following statements is correct for the long run? A-Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for loanable funds; the price level adjusts to balance the supply and demand for money. B-Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for loanable funds; the price level is relatively slow to adjust. C-Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for money; the price level adjusts to balance the supply and demand for loanable funds. D-Output responds to the aggregate demand for goods and services; the interest rate adjusts to balance the supply and demand for loanable funds; the price level adjusts to balance the supply and demand for money.
A-Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for loanable funds; the price level adjusts to balance the supply and demand for money.
In equilibrium which of the following happens if the U.S. imposes tariffs on power tools? A-U.S. production of power tools rises B-U.S. net exports rise C-the exchange rate falls D-All other answsers are correct.
A-U.S. production of power tools rises
Which of the following is not a commonly-cited explanation for the dramatically increasing labor-force participation rates for women from 1950 to the present? A-an increasing number of women who work to support their parents B-invention of household labor-saving devices such as dishwashers and microwave ovens C-changing social attitudes about working mothers D-availability of reliable birth control
A-an increasing number of women who work to support their parents
f the natural rate of unemployment falls, A-both the short-run Phillips curve and the long-run Phillips curve shift. B-only the short-run Phillips curve shifts. C-only the long-run Phillips curve shifts. D-neither the short-run nor the long-run Phillips curves shift.
A-both the short-run Phillips curve and the long-run Phillips curve shift.
Sectoral changes in demand A-create frictional unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment. B-and firms paying wages above equilibrium to attract a better pool of candidates both create frictional unemployment. C-and firms paying wages above equilibrium to attract a better pool of candidates both create structural unemployment. D-create structural unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates frictional unemployment.
A-create frictional unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment.
If an economy uses silver as money, then that economy's money A-is commodity money. B-has no intrinsic value. C-serves as a medium of exchange but not as a unit of account. D-serves as a store of value but not as a medium of exchange.
A-is commodity money.
If people decide to hold less money, then A-money demand decreases, there is an excess supply of money, and interest rates fall. B-money demand increases, there is an excess demand for money, and interest rates. C-ey demand decreases, there is an excess supply of money, and interest rates rise. D-money demand increases, there is an excess demand for money, and interest rates rise.
A-money demand decreases, there is an excess supply of money, and interest rates fall.
Which of the following shifts the short-run aggregate supply curve right? A-neither an increase in the price level that is greater than expected nor an increase in the expected price level. B-an increase in the expected price level, but not an increase in the price level that is greater than expected. C-an increase in the price level that is greater than expected, but not an increase in the expected price level. D-both an increase in the price level that is greater than expected and an increase in the expected price level.
A-neither an increase in the price level that is greater than expected nor an increase in the expected price level.
A Chinese company exchanges yuan (Chinese currency) for dollars. It uses these dollars to purchase scrap metal from a U.S. company. As a result of these transactions, Chinese A-net exports decrease, and U.S. net capital outflow decreases. B-net exports increase, and U.S. net capital outflow increases. C-net exports decrease, and U.S. net capital outflow increases. D-net exports increase, and U.S. net capital outflow decreases.
A-net exports decrease, and U.S. net capital outflow decreases.
According to purchasing-power parity, if the price of a basket of goods in the U.S. rose from $2,000 to $2,104 and the price of the same basket of goods rose from 800 units to 832 units of some other country's currency, then the A-nominal exchange rate would depreciate. B-real exchange rate would depreciate. C-nominal exchange rate would appreciate. D-real exchange rate would appreciate.
A-nominal exchange rate would depreciate.
Your spouse complains that her 6% raise this year will not keep up with the increase in prices. In other words, she is unable to buy the same basket of goods with her 6% raise. Therefore, she believes that her A-nominal income increased, but their real income decreased. B-nominal income and real income increased. C-nominal income and real income decreased. D-nominal income decreased, but their real income increased.
A-nominal income increased, but their real income decreased.
During the financial crisis it was proposed that firms be provided with a tax credit for investment projects. Such a tax credit would A-raise both the interest rate and the real exchange rate. B-reduce the interest rate and raise the real exchange rate. C-reduce both the interest rate and the real exchange rate. D-raise the interest rate and reduce the real exchange rate.
A-raise both the interest rate and the real exchange rate.
If people decide to hold less currency relative to deposits, the money supply A-rises. The Fed could lessen the impact of this by selling Treasury bonds. B-falls. The Fed could lessen the impact of this by selling Treasury bonds C-rises. The Fed could lessen the impact of this by buying Treasury bonds. D-falls. The Fed could lessen the impact of this by buying Treasury bonds.
A-rises. The Fed could lessen the impact of this by selling Treasury bonds.
If the U.S. were to impose import quotas A-the demand for dollars in the market for foreign-currency exchange would increase, but the demand for loanable funds would not. B-the demand for loanable funds would increase, but the demand for dollars in the market for foreign-currency exchange would not. C-demand for loanable funds and the demand for dollars in the market for foreign-currency exchange would both increase. D-nether the demand for loanable funds nor the demand for dollars in the market for foreign-currency exchange would increase.
A-the demand for dollars in the market for foreign-currency exchange would increase, but the demand for loanable funds would not.
According to liquidity preference theory, a decrease in money demand for some reason other than a change in the price level causes A-the interest rate to fall, so aggregate demand shifts right. B-the interest rate to fall, so aggregate demand shifts left. C-the interest rate to rise, so aggregate demand shifts left. D-the interest rate to rise, so aggregate demand shifts right
A-the interest rate to fall, so aggregate demand shifts right.
What is the value of M1 in billions of dollars? A-$ 2,825 billion B-$ 1,915 billion C-$ 2,665 billion D-$ 1,900 billion
B-$ 1,915 billion
If a $1,000 increase in income leads to an $800 increase in consumption expenditures, then the marginal propensity to consume is A-0.2 and the multiplier is 1.25. B-0.8 and the multiplier is 5. C-0.2 and the multiplier is 1.25. D-0.8 and the multiplier is 8.
B-0.8 and the multiplier is 5.
Initially, the economy is in long-run equilibrium. The aggregate demand curve then shifts $80 billion to the left. The government wants to change spending to offset this decrease in demand. The MPC is 0.75. Suppose the effect on aggregate demand of a tax change is 3/4 as strong as the effect of a change in government expenditure. There is no crowding out and no accelerator effect. What should the government do if it wants to offset the decrease in real GDP? A-Reduce both taxes and expenditures by $10 billion dollars. B-Raise both taxes and expenditures by $80 billion dollars. C-Raise both taxes and expenditures by $10 billion dollars. D-Reduce both taxes and expenditures by $80 billion dollars.
B-Raise both taxes and expenditures by $80 billion dollars.
Which of the following is correct? A-The Federal Reserve has 12 regional banks. The Board of Governors has 12 members who serve 7-year terms. B-The Federal Reserve has 12 regional banks. The Board of Governors has 7 members who serve 14-year terms. C-The Federal Reserve has 14 regional banks. The Board of Governors has 7 members who serve 14-year terms. D-The Federal Reserve has 14 regional banks. The Board of Governors has 12 members who serve 7-year terms.
B-The Federal Reserve has 12 regional banks. The Board of Governors has 7 members who serve 14-year terms.
Which of the following is most likely to result if foreigners decide to withdraw the funds that they have loaned to the United States? A-US domestic investment will rise B-US net capital outflow will rise C-the dollar will appreciate D-US net exports will fall
B-US net capital outflow will rise
The wealth effect stems from the idea that a higher price level A-decreases the real value of households' money holdings. B-decreases the real value of the domestic currency in foreign-exchange markets. C-increases the real value of households' money holdings. D-increases the real value of the domestic currency in foreign-exchange markets.
B-decreases the real value of households' money holdings.
In the open-economy macroeconomic model, the quantity of dollars demanded in the market for foreign-currency exchange A-and the quantity of dollars supplied in the market for foreign-currency exchange depend on the real exchange rate. B-depends on the real exchange rate. The quantity of dollars supplied in the foreign-exchange market depends on the real interest rate. C-depends on the real interest rate. The quantity of dollars supplied in the foreign-exchange market depends on the real exchange rate. D-and the quantity of dollars supplied in the market for foreign-currency exchange depend on the real interest rate.
B-depends on the real exchange rate. The quantity of dollars supplied in the foreign-exchange market depends on the real interest rate.
Ann, a U.S. citizen, uses some previously obtained euros to purchase a bond issued by a Spanish company. This transaction A-increases U.S. net capital outflow by the value of the bond. B-does not change U.S. net capital outflow. C-decreases U.S. net capital outflow. D-reases U.S. net capital outflow by more than the value of the bond.
B-does not change U.S. net capital outflow.
A movement to the left along a given short-run Phillips curve could be caused by A-either a reduction in the natural rate of unemployment or a contractionary monetary policy. B-expansionary monetary policy, but not a reduction in the natural rate of unemployment. C-a reduction in the natural rate of unemployment or expansionary monetary policy. D-contractionary monetary policy, but not a reduction in the natural rate of unemployment.
B-expansionary monetary policy, but not a reduction in the natural rate of unemployment.
If Spain has a trade deficit, then A-foreign countries purchase fewer Spanish assets than Spain purchases from them. This makes Spanish saving greater than Spanish domestic investment. B-foreign countries purchase more Spanish assets than Spain purchases from them. This makes Spanish saving smaller then Spanish domestic investment. C-foreign countries purchase fewer Spanish assets than Spain purchases from them. This makes Spanish saving greater than Spanish domestic investment. D-foreign countries purchase more Spanish assets than Spain purchases from them. This makes Spanish saving greater than Spanish domestic investment.
B-foreign countries purchase more Spanish assets than Spain purchases from them. This makes Spanish saving smaller then Spanish domestic investment.
If purchasing-power parity holds but then U.S. prices rise, which of the following move the exchange rate back towards purchasing-power parity? A-foreign prices fall or the U.S. nominal exchange rate rises B-foreign prices rise or the U.S. nominal exchange rate falls C-foreign prices fall or the U.S. nominal exchange rate falls D-foreign prices rise or the U.S. nominal exchange rate rises
B-foreign prices rise or the U.S. nominal exchange rate falls
If inflation is less than expected, then the unemployment rate is A-greater than the natural rate. In the long run the short-run Phillips curve will shift right. B-greater than the natural rate. In the long run the short-run Phillips curve will shift left. C-less than the natural rate. In the long run the short-run Phillips curve will shift left. D-less than the natural rate. In the long run the short-run Phillips curve will shift right.
B-greater than the natural rate. In the long run the short-run Phillips curve will shift left.
In the context of the aggregate-demand curve, the interest-rate effect refers to the idea that, when the price level increases, A-households increase their holdings of money; in turn, interest rates decrease, which reduces spending on investment goods. B-households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods. C-the real value of money decreases; in turn, interest rates increase, which decreases net exports. D-the real value of money decreases; in turn, the real value of the dollar increases in foreign exchange markets, which decreases net exports.
B-households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods.
Other things the same, if the price level falls, people A-increase domestic bond purchases, so the dollar appreciates. B-increase foreign bond purchases, so the dollar depreciates. C-increase domestic bond purchases, so the dollar depreciates. D-increase foreign bond purchases, so the dollar appreciates.
B-increase foreign bond purchases, so the dollar depreciates.
If a country has a trade surplus A-it has positive net exports and negative net capital outflow. B-it has positive net exports and positive net capital outflow. C-it has negative net exports and negative net capital outflow. D-it has negative net exports and positive net capital outflow.
B-it has positive net exports and positive net capital outflow.
If outsiders had more say in union contracts then it is likely that union wages would be A-higher so unemployment would be higher. B-lower so unemployment would be lower. C-higher so unemployment would be lower. D-lower so unemployment would be higher.
B-lower so unemployment would be lower.
In which case, if any, will inflation remain higher after a temporary adverse supply shock? A-both when the central bank maintains a higher money supply growth rate and when the central bank does nothing B-only if the central bank maintains a higher money supply growth rate C-None of these. Whether the central bank maintains a higher money supply growth rate or not, the inflation rate will return to its original level. D-only if the central bank does nothing
B-only if the central bank maintains a higher money supply growth rate
In which case can we be sure aggregate demand shifts left overall? A-people want to save less for retirement and the Fed increases the money supply. B-people want to save more for retirement and the Fed decreases the money supply. C-people want to save less for retirement and the Fed decreases the money supply. D-people want to save more for retirement and the Fed increases the money supply.
B-people want to save more for retirement and the Fed decreases the money supply.
Who in the adult population is counted as "employed" in U.S. labor statistics? A-people who are temporarily absent from their job but not people who work without pay in a family member's business B-people who are temporarily absent from their job and people who work without pay in a family member's business C-neither people who are temporarily absent from their job nor people who work without pay in a family member's business D-people who work without pay in a family member's business but not people who are temporarily absent from their job
B-people who are temporarily absent from their job and people who work without pay in a family member's business
Other things the same, the real exchange rate between American and Chinese goods would be higher if A-prices of Chinese goods were higher, or the number of yuan a dollar purchased was lower. B-prices of Chinese goods were lower, or the number of yuan a dollar purchased was higher. C-prices of Chinese goods were lower, or the number of yuan a dollar purchased was lower. D-prices of Chinese goods were higher, or the number of yuan a dollar purchased was higher.
B-prices of Chinese goods were lower, or the number of yuan a dollar purchased was higher.
if at a given real interest rate desired national saving is $140 billion, domestic investment is $90 billion, and net capital outflow is $60 billion, then at that real interest rate in the loanable funds market there is a A-surplus. The real interest rate will rise. B-shortage. The real interest rate will rise. C-shortage. The real interest rate will fall. D-surplus. The real interest rate will fall.
B-shortage. The real interest rate will rise.
If U.S. residents chose to travel overseas less due to concerns about the safety of foreign travel, then in the open- economy macroeconomic model A-the supply of dollars in the market for foreign-currency exchange shifts. B-the demand for dollars in the market for foreign-currency exchange shifts right. C-the supply of dollars in the market for foreign-currency exchange shifts right. D-the demand for dollars in the market for foreign-currency exchange shifts.
B-the demand for dollars in the market for foreign-currency exchange shifts right.
The long-run effect of an increase in household consumption is to raise A-both real output and the price level. B-the price level and leave real output unchanged. C-real output and leave the price level unchanged. D-real output and lower the price level
B-the price level and leave real output unchanged.
If saving is greater than domestic investment, then A-there is a trade deficit and Y < C + I + G. B-there is a trade surplus and Y > C + I + G. C-there is a trade surplus and Y < C + I + G. D-there is a trade deficit and Y > C + I + G.
B-there is a trade surplus and Y > C + I + G
Assume that there is no accelerator affect. The MPC = 3/4. The government increases both expenditures and taxes by $600. The effect of taxes on aggregate demand is 3/4 the size of that created by government expenditures alone. The crowding out effect is 1/5 as strong as the combined effect of government expenditures and taxes on aggregate demand. How much does aggregate demand shift by? A-$0 B-$160 C-$480 D-$1480
C-$480
Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate? A-9.1% B-6.25% C-8.3% D-18.75%
C-8.3%
Which of the following is correct? A-An increase in stock prices reduces consumption spending so that aggregate demand shifts left. B-An increase in the price level causes the exchange rate to rise so that aggregate demand shifts left. C-A recession in other countries reduces U.S. net exports so that U.S. aggregate demand shifts left. D-An increase in the money supply causes the interest rate to decrease so that aggregate demand shifts left.
C-A recession in other countries reduces U.S. net exports so that U.S. aggregate demand shifts left.
In 1995 House Speaker Newt Gingrich threatened to send the United States into default on its debt. During the day of this announcement, U.S. interest rates rose and the real exchange rate of the U.S. dollar depreciated. Which of these changes is consistent with the results of the open-economy macroeconomic model? A-the increase in U.S. interest rates B-the depreciation of the real exchange rate of the U.S. dollar C-Both a and b are consistent. D-Neither a nor b are consistent.
C-Both a and b are consistent.
Which of the following is not correct? A-The power of a union comes from its ability to strike if the union and the firm do not agree on the terms of employment. B-An organized withdrawal of labor from a firm by a union is called a strike. C-Economists who study the effects of unions typically find that union workers earn about 25 to 35 percent more than similar workers who do not belong to unions. D-Workers in unions reap the benefit of collective bargaining, while workers not in unions bear some of the cost.
C-Economists who study the effects of unions typically find that union workers earn about 25 to 35 percent more than similar workers who do not belong to unions.
Which of the following is not correct? A-During the 19th century there were long periods of falling prices in the U.S. B-he inflation rate is measured as the percentage change in a price index. C-For the last 40 or so years, U.S. inflation hasn't shown much variation from its average rate of about 2 percent. D-Some economists argue that the costs of moderate inflation are not nearly as large as the general public believes.
C-For the last 40 or so years, U.S. inflation hasn't shown much variation from its average rate of about 2 percent.
In 1975 tuition at Wattsomata University was $2,500 and the consumer price index was 80. In 2011 tuition was $12,000 and the price index was 320. Which of the following is correct? A-Nominal and real tuition were both higher in 1975. B-Nominal tuition was higher in 2011, real tuition was higher in 1975. C-Nominal and real tuition were both higher in 2011. D-Nominal tuition was higher in 1975, real tuition was higher in 2011.
C-Nominal and real tuition were both higher in 2011.
In the nineteenth century, some countries were on a gold standard so that on average the money supply growth rate was close to zero and expected inflation was more or less constant. For these countries during this time period, we find that increases in actual inflation were generally associated with falling unemployment. These findings A-are inconsistent with Friedman and Phelps's theories, because they argued that inflation and unemployment are unrelated. B-are consistent with Friedman and Phelps's theories, because they argued that when prices rose unemployment would fall whether actual inflation was higher than expected or not. C-are consistent with Friedman and Phelps's theories, because they argued that when inflation was higher than expected, unemployment would fall. D-are inconsistent with Friedman and Phelps's theories, because they argued that higher inflation would increase unemployment.
C-are consistent with Friedman and Phelps's theories, because they argued that when inflation was higher than expected, unemployment would fall.
Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. To explain this A-it is only necessary that aggregate demand shifts right over time. B-None of the other cases would produce rising prices and growing real GDP over time C-both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must be shifting farther. D-it is only necessary that long-run aggregate supply shifts right over time.
C-both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must be shifting farther.
A reduction in U.S net exports would shift U.S. aggregate demand A-rightward. In an attempt to stabilize the economy, the government could decrease expenditures. B-leftward. In an attempt to stabilize the economy, the government could decrease. C-leftward. In an attempt to stabilize the economy, the government could increase expenditures. rD-ightward. In an attempt to stabilize the economy, the government could increase expenditures.
C-leftward. In an attempt to stabilize the economy, the government could increase expenditures.
The aggregate quantity of goods and services demanded changes as the price level rises because A-real wealth rises, interest rates fall, and the dollar depreciates. B-real wealth falls, interest rates rise, and the dollar depreciates. C-real wealth falls, interest rates rise, and the dollar appreciates. D-real wealth rises, interest rates fall, and the dollar appreciates.
C-real wealth falls, interest rates rise, and the dollar appreciates.
The supply of money increases when A-the price level falls. B-the interest rate increases. C-the Fed makes open-market purchases. D-money demand increases.
C-the Fed makes open-market purchases.
A U.S. bank wants to buy euros in order to buy German bonds. In the open-economy macroeconomic model, this transaction would be part of A-the demand for currency in the foreign exchange market, and part of the demand for loanable funds. B-the supply of currency in the foreign exchange market, and part of the supply of loanable funds. C-the supply of currency in the foreign exchange market, and part of the demand for loanable funds. D-he demand for currency in the foreign exchange market, and part of the supply of loanable funds.
C-the supply of currency in the foreign exchange market, and part of the demand for loanable funds.
Which of the following statements is correct? A-Credit cards are included in both M1 and M2. B-All items that are included in M2 are included also in M1. C-Savings deposits are included in both M1 and M2. D-All items that are included in M1 are included also in M2.
D-All items that are included in M1 are included also in M2.
Any policy change that reduced the natural rate of unemployment would A-shift the long-run Phillips curve to the left. B-shift the long-run aggregate-supply curve to the right. C-improve the functioning of the labor market. D-All of the above are correct.
D-All of the above are correct.
Suppose the economy is in long-run equilibrium. In a short span of time, there is an increase in the money supply, a tax decrease, a pessimistic revision of expectations about future business conditions, and a rise in the value of the dollar. In the short run, we would expect A-the price level and real GDP both to rise. B-the price level and real GDP both to fall. C-the price level and real GDP both to stay the same. D-All of the above are possible.
D-All of the above are possible.
When shopping you notice that a pair of jeans costs $20 and that a tee-shirt costs $10. You compute the price of jeans relative to tee-shirts. A-The dollar price of jeans and the relative price of jeans are both real variables. B-The dollar price of jeans and the relative price of jeans are both nominal variables. C-The dollar price of jeans is a real variable; the relative price of jeans is a nominal variable. D-The dollar price of jeans is a nominal variable; the relative price of jeans is a real variable.
D-The dollar price of jeans is a nominal variable; the relative price of jeans is a real variable.
Assume the following: • The MPC has a value of 0.8. • The relationship between the interest rate, r, and investment, I, is given by the equation, I = 20,000 - br, where b is a positive constant. • Government purchases, G, are increased by $1,000. In which of the following cases would there be no crowding out? A-b=0.8 B-b=0.2 C-b=1 D-b=0
D-b=0
Changes in nominal variables are determined mostly by the quantity of money and the monetary system according to A-the quantity theory of money, but not the classical dichotomy. B-the classical dichotomy, but not the quantity theory of money. C-neither the classical dichotomy nor the quantity theory of money. D-both the classical dichotomy and the quantity theory of money.
D-both the classical dichotomy and the quantity theory of money.
Suppose the U.S. supply of loanable funds shifts left. This will A-increase U.S. net capital outflow and decrease the quantity of loanable funds demanded. B-increase U.S. net capital outflow and increase the quantity of loanable funds demanded. C-decrease U.S. net capital outflow and increase the quantity of loanable funds demanded. D-decrease U.S. net capital outflow and decrease the quantity of loanable funds demanded.
D-decrease U.S. net capital outflow and decrease the quantity of loanable funds demanded.
According to the quantity equation, the price level would change less than proportionately with a rise in the money supply if there were also A-either a fall in output or a rise in velocity. B-either a rise in output or a rise in velocity. C-either a fall in output or a fall in velocity. D-either a rise in output or a fall in velocity.
D-either a rise in output or a fall in velocity.
When the money market is drawn with the value of money on the vertical axis, if money demand shifts leftward, then initially there is an A-excess supply of money which causes the price level to rise. B-excess supply of money which causes the price level to fall. C-excess demand for money which causes the price level to fall. D-excess demand for money which causes the price level to rise.
D-excess supply of money which causes the price level to rise.
When the money market is drawn with the value of money on the vertical axis, as the price level decreases, the value of money A-increases, so the quantity of money demanded increases. B-decreases, so the quantity of money demanded increases. C-decreases, so the quantity of money demanded decreases. D-increases, so the quantity of money demanded decreases.
D-increases, so the quantity of money demanded decreases.
There is an adverse supply shock. In response the Federal Reserve pursues an expansionary monetary policy. Taking into account both the shock and the Federal Reserve's policy, which of the following are we sure of? A-unemployment will be higher B-unemployment will be lower C-inflation will be lower D-inflation will be higher
D-inflation will be higher
Frictional unemployment results from A-job searching. It is often thought to explain relatively long spells of unemployment. B-a surplus in some labor markets. It is often thought to explain relatively long spells of unemployment. C-a surplus in the some labor markets. It is often thought to explain relatively short spells of unemployment. D-job searching. It is often thought to explain relatively short spells of unemployment.
D-job searching. It is often thought to explain relatively short spells of unemployment.
If a country has negative net capital outflows, then its net exports are A-negative and its saving is larger than its domestic investment. B-positive and its saving is larger than its domestic investment. C-positive and its saving is smaller than its domestic investment. D-negative and its saving is smaller than its domestic investment.
D-negative and its saving is smaller than its domestic investment.
Christopher is an unpaid, stay-at-home father who works as a volunteer at the local Habitat for Humanity chapter. Currently, Christopher is not looking for a paid job. The Bureau of Labor Statistics counts Christopher as A-unemployed and in the labor force. B-in the labor force but not unemployed. C-unemployed but not in the labor force. D-neither in the labor force nor unemployed.
D-neither in the labor force nor unemployed.
An economic expansion caused by a shift in aggregate demand causes prices to A-fall in the short run, and rise back to their original level in the long run. B-rise in the short run, and fall back to their original level in the long run C-fall in the short run, and fall even more in the long run. D-rise in the short run, and rise even more in the long run.
D-rise in the short run, and rise even more in the long run.
Dollar bills, rare paintings, and emerald necklaces are all A-All other answers are true. B-units of account. C-media of exchange. D-stores of value.
D-stores of value.
Assume there is a multiplier effect, some crowding out, and no accelerator effect. An increase in government expenditures changes aggregate demand more, A-the smaller the MPC and the stronger the influence of income on money demand. B-the larger the MPC and the stronger the influence of income on money demand. C-the smaller the MPC and the weaker the influence of income on money demand. D-the larger the MPC and the weaker the influence of income on money demand
D-the larger the MPC and the weaker the influence of income on money demand.
Who of the following is not included in the Bureau of Labor Statistics' "employed" category? A-those who were temporarily absent from work because of vacation B-those who worked as unpaid workers in a family member's business C-those who worked in their own business D-those waiting to be recalled to a job from which they had been laid off
D-those waiting to be recalled to a job from which they had been laid off
As the aggregate demand curve shifts leftward along a given aggregate supply curve A-unemployment and inflation are higher. B-unemployment and inflation are lower. C-unemployment is lower and inflation is higher. D-unemployment is higher and inflation is lower.
D-unemployment is higher and inflation is lower.
In December 1999 people feared that there might be computer problems at banks as the century changed. Consequently, people wanted to hold relatively more in currency and relatively less in deposits. In anticipation banks raised their reserve ratios to have enough cash on hand to meet depositors' demands. These actions by the public A-would increase the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have sold bonds. B-would increase the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have bought bonds. C-would reduce the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have sold bonds. D-would reduce the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have bought bonds.
D-would reduce the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have bought bonds.
In the short run, policy that changes aggregate demand changes A-only unemployment. B-both unemployment and the price level. C-neither unemployment nor the price level. D-only the price level.
both unemployment and the price level.
