Econ FLVS 31-60
Which of the following is true of supply shock?
A. They tend to change both relative prices and the general price level in the economy
the consumer price index measures which of the following
A. the change over time of the weighted prices of a particular group and goods and services
Which of the following is most likely to increase if the public decides to increase its holding of currency?
A. the interest rates.
If a large increase in total spending has no effect on real gross domestic product, it must be true that
A. the price level is rising
Suppose the required reserve ratio is 20 percent and a single bank with no excess reserves receives a $100 deposit from a new customer. The bank now has excess reserves equal to?
B. $80
Which of the following groups of people would benefit from unanticipated inflation?
B. 2 only (borrowers)
If higher United States interest rates cause foreign demand for the dollar to increase which of the following will occur to the international value of the dollar and to United States Exports?
B. B (International value of the dollar increase, exports decrease)
Under which of the following circumstances would increasing the money supply be most effective in increasing Real gross domestic product?
B. B (interest rates high, employment less than full, business optimism high)
An increase in which of the following is most likely to increase the long-run growth rate of an economy's real per capita income?
C. The educational attainment of the population
According to both monetarists and Keynesians, Which fo the following happens when the Federal reserve reduces the discount rate?
C. The supply of money increases and market interest rates decrease
which of the following is true if the economy is producing at the full- employment level of output
C. There is frictional unemployment
The table below indicates the number of labor hours required in Countries X and Y to produce one unit of food or one unit of clothing. Given this information which of the following statements is correct?
C. X has a comparative advantage in food production, where as Y has a comparative advantage in clothing production
an inflationary gap could be reduced by
C. an increase in the income tax rate
current equilibrium output equals $2,500,000 potential output equals $2,600,000 and the marginal propensity to consume equals .75. Under these conditions, a Keynesian economist is most likely to recommend
C. increasing government spending by $25,000
According to Keynesian theory, the most important determinant of saving and consumption is the
C. level of income
The Circular flow of economic activity between consumers and producers includes which of the following?
D. 2 and 3 only, Households sell factor services to firms, and households buy outputs from firms
Suppose that from 1985 to 1986 unemployment fell from 7.2 to 7.0 percent and inflation fell from 3.8 to 1.1 percent. An explanation of these changes might be that the
D. Aggregate supply curve shifted to the right
Which of the following is a key feature of Keynesian economics?
D. Macroeconomics equilibrium can occur at less than full employment
An increase in the money supply will have the greatest effect on real GDP if
D. the quantity of money demanded is not very sensitive to interest rates.
Which of the following monetary and fiscal policy combinations would most likely result in a decrease in aggregate demand
E. Discount rate raise, Open-market operations sell bonds, Government spending decrease
Faces with a large federal budget deficit, the government decides to decrease expenditures and tax revenues by the same amount. This action will affect output and interest rates in which of the following way?
E. E (Output decrease, interest rates decrease)
AN increase in the labor force participation rate will
E. Make it more difficult to reduce unemployment
An increase in which of the following is most likely to cause an improvement in the standard of living over time?
E. Productivity of labor
During a mild recession if policymakers want to reduce unemployment by increasing investment, which of the following policies would be most appropriate?
E. Purchase of government securities by the Federal Reserve
Which fo the following will most likely result from a decrease in government spending
E. a decrease in aggregate demand
IF crowding out only partially offsets the effect of a tax cut, which of the following changes in interest rates and GDP are most likely to occur?
A. A (interest rates increase, GDP increase)
All of the following are components of the money supply in the United States EXCEPT
B. Gold bullion
Which of the following is a basic tenet of classical economic analysis
B. The economy is self- correcting to full employment
The long-run aggregate supply curve is likely to shift to the right when there is
B. an increase in productivity
The graph above depicts an economy's aggregate demand and aggregate supply curves. If the aggregate demand remains constant, tHe equilibrium price levels in the short run and in the long run will be which of the following?
B. b
