macro sheflin hwk 12

macro sheflin hwk 12 - hw12 Multiple Choice Identify the...

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hw12 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Fluctuations in employment and output result from changes in a. aggregate demand only. b. aggregate supply only. c. aggregate demand and aggregate supply. d. neither aggregate demand nor aggregate supply. ____ 2. In the fall of 2002, consumers indicated that they were less optimistic about the future of the economy. This change in sentiment would likely a. shift aggregate demand left b. decrease output c. increase unemployment d. All of the above are correct. ____ 3. "Leaning against the wind" is exemplified by a(n) a. tax cut when there is an expansion. b. decrease in the money supply when there is a recession. c. increase in government expenditures when there is a recession. d. All of the above are correct. ____ 4. Those who desire that policymakers stabilize the economy would advocate which of the following when aggregate demand is insufficient to ensure full employment? a. decrease the money supply b. decrease taxes c. decrease government expenditures d. None of the above is correct. ____ 5. Suppose aggregate demand fell. In order to stabilize the economy, the government might a. increase the money supply. b. increase government expenditures. c. decrease taxes. d. All of the above are correct. ____ 6. In general, the longest lag for a. both fiscal and monetary policy is the time it takes to change policy. b. both fiscal and monetary policy is the time it takes for policy to affect aggregate demand. c. monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand. d. fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand. ____ 7. The principal reason that monetary policy has lags is that it takes a long time for a. changes in the interest rate to change aggregate demand. b. changes in the money supply to change interest rates. c. the Fed to make changes in policy. d. None of the above is correct. ____ 8. Opponents of using policy to stabilize the economy generally believe that a. neither fiscal nor monetary policy have much impact on aggregate demand. b. attempts to stabilize the economy can increase the magnitude of economic fluctuations.
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c. unemployment and inflation are not cause for much concern. d. All of the above are correct. ____ 9. The effects of a decline in the value of financial assets, such as stocks, on consumption and the economy might be offset by a. increasing the government spending. b. decreasing the money supply. c. increasing taxes. d. None of the above is correct. ____ 10.
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This note was uploaded on 09/26/2008 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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macro sheflin hwk 12 - hw12 Multiple Choice Identify the...

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