Econ_Exam_3_practice_MCs

Econ_Exam_3_practice_MCs - —TI The upWard sloping section...

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Unformatted text preview: —TI The upWard sloping section of die aggregate suppi}r curve can be explained by z {A} EXCESS capacity that allows output to increase without upward piggssure on prices {B} the physical limit on output that prevents additional output From being produced {Cl wages and other inputprices that adfust more slowly than output prices [DJ accurate information within firms about how thei.r priCes compare to the overall price level [E] a rational desire to produce more at higher price levels because the prices received for item sold will in—turn allow the sellers to purchase more output from others F N . . . . . . fig.— IW'hich ot l';‘|€- followutg is a direct. accurare f' .link within the circular flow? {A} Goods and services are exchanged for inputs via the factor markets. {3} TWages and rents are exchanged for income via the product markets. (C) Household expenditures result in revenues for firms via the product .11.! markets. (D) Household income resultsin revenues via the factor markets. ' T [E] Firms exchange revenues for land, labor, and capital via the product marl-cots. ‘6. Which of the following would be an example of fiat money? {A} Cigarettes used as inoneji.r in prisons [Bl Dollar bills {C} Gold Coins [D] Arrowheads used as a medium of exchange {El Chickens used for barrering 3' prescribed to [A] eliminate a recession-an: tE} reduce inflation {C} reduce the interest rate {El eliminate an inflationary l:EI avoid crowding out _. Expansionarv fiscal -_:iolicj,r Would best be see 3513‘ | "——'-.7‘Ji:‘r}-e-horiz: fin, WI. I'he aggregate demand Curve is mt-si—su corn etion—o ferret-het— eiernenci curves 3 horizontal summer curves [C] a simple aggregation of demand con-es for individuai goods LD': :1 i'errice'l summer-ion c iE} ion of firm demand 1.: 5 firm demo rid Curves IE: not found by eddlng product demand curves horizontali‘; or vertically ..-'~. \ . ‘13-.“ Llaschal economists behei'e :.—‘t_‘| in the quanoty theory of money—that and the clLisi-itityr of both '2. .e i-cloci 2}" id 3e: period are goods and services so iairijr srahle [ti'n there is a serious risk oi e iiouiclit}r trap | cl cur-so tor monei.r is I 'J | ‘oecaose the deroan relatively Flat [if] that the government should effort to fine nine the economyr ID} that the aggregate supply curve is Lr I shaped EE'I that an inc 3. srnai'. and. indirect effe- soenciinw 1 El @ mail-Le ever"; resse in the money supply has -.:t on Lotsi _ if. il'he aggregate ciern The aggregate suppli,r curve will shift to the rish.iéiresemssfl_ __ __ '- {.—‘~.] 3. deueese in the ia‘oor sop-phr- _ iEn} an increase in investment in capital rCi an increase in corporate taxes {Di :1 ciecrease in the availability of education and training ashore! dis-esters [E] —wI-l-I.1 I—uu— snti curve has s negative /sioipe in part because Twhen the price levei increases {A} the value of cash increases ,IIE] imnorLs become relatively- [Ci the real quantity of money {D] the interest rare increases LE} exports increase more expensive increases .— as H's-all 5L .' - _.... a :[u d' r . I r 135 l“ Kelmfllflfl econormsrs, n' _- -:a‘ tit 'z . - IL/ { j— E' rr'rlestmerrt demandeu-we-ls—rolati-Fel ' I EiESllC - f 1:. - - 'g [B] “soul policy 15 more effective than . . . monetary 130110.: If? too economy is ltLherentls' stable . I "' l' I - - _ J made-qua: sup-ply is largely to blame for E periods ot stagnation [ _J sea. EDP will naturally adjust to the fill-'— EEleoy‘me-nt lE‘.-'|2l I - fi' F * - . . i '. .' 20. all differenee between Ml and M: is that l 1] - _.-"'[m Ml is a first mortgage and M2- ls e second ..—' : mortgage . I $1 " _ _' QB} MB is Ml plus assets that are more liquid I g; ._ j [C] Mil imiudes savings deposits {t ‘T . ' g (D) Ml is larger than 5712 ' l fl _ [E] I‘vl‘l is always double Ml as _ _ fix I E "if 21. IFNhn-Lh of the following will cause the aggre— EE': ' ' ' _ _'gate demand curve to shift to the lei-.3” I “I: . i § [55} Expectations of 5L:l';':luE-CS of goods in the ' '* _ future '75.: ' [E] A decrease in income taxes "i ' til] An increase in government spending ,I'" I ' .. . ID} An increase ln foreign income first: tEfJ Expectations of 1nflat1on in the future; | J (25—1551551595 1515111125 preduetion' 1e55‘ expensive and at the 551115 time 5x11121155 decrease which ___ _51 -l'LLEGflMllEJafl-Jl 1511.15.11.11 tche:.t5.i.1:..-1;.?. .1" _ ,1» ” $15.1 51151121111 11.111111111111511 l‘ \\ f/ {E} R551 GDP will decrease ‘1 ‘f/ l IC] Tue 1:11-11..eie1.e] 111ill11'1c1'e5511 “1-4" ID} The 11:51:13 level will decrease If \~\—*‘~ ”l I [E] Rea: output '11-'15] 1151:1151: the 5551-5 Ix. -1.\ I .11” \\_ 11.111 ' \ .111 Eee.-.'1i'.1[' _ 1 . , . _ . . . _ :1 “II-7111111 -:1t tne 1151111111111: 15 1111.15t15ted 111 the figure above? i. 51515111511511 II. Cc5t— 121—11511 Inflation [11. Sup... nI--1.' 5'Iuie 1111111111111 LR". a"1'1-111'15r'11.'l-"l_:1.11'."1"I"II.':5 tun {.51 [5115111111511- . % I'BJ II 5111?: HI 1:111le 1C1 II 5111'. I11" 1511171 I D} [‘11: 1511-1131 IE1 I end 1"1'111121' 1' '25. The long- r-.1t: [155511.15] a~1fteg51e5upt11y curve .-" 3L; I_.'-'1.J horizontal at market r-riee 3'“ {B} vertical at 11.1; ]——e1'J'11:.1l111.'111e1'1t 1151:1111 IC'I 1:11:151t: 1:511:11 "'. 151.11.11.11 ___. 1ert1eelat the F1115 551:5 J-]'11:1-1.'t for Output IE] neg511'1-el1'51'eped '-...___.' 2?. Bening a f1'5e1111r1a] te5e "EL-15115111; system --"' means tnqt 1.4.11 :10 single-10511 1:511 be larger then 2D ‘ Ger-cent 151‘ the 11511}: 5 h1.1-.' dim-'15 _ {fill the cent1'511'15nk re5e:1 1:15 tl ['1‘ 1‘15'1'11 'III'I audit ' "Cl fi' 5111' bank at 5:111 tin-1e —'- 1CI the cent151h5111< 1102115 a cett5111 tract—112111 at I GDP 11:1 reserve 5: 11115121155 ID] the 1:1:-.11I1'21.-ha:11< 11-1115: approve 11.111- 115 ever 51 fil11111n IE1 .3 11.1111; eannet 1511c; 111.1ta.|iu;11' it5 depesits . .. _ fl- . . .I 33 ,.[Jreu,-_:hts, technical gtite'nes. ene' restrictsnnn _.x en the use ut reseurees car-r e11 reeult in _ / LEI.) :1 verneal F'l'llllt“5 curve I3; supply sheet-cs {L} structural shocks tDj: demandapull inflation tE‘J detiatten I ' , r. . {50.1 a bank's balance sheet,wt1.i-:h e]: the - ' r'ellewing is rens1nered .1 Etntulizy? _ (A; Required resen'es :-::' I'B": Excess reserves. ' . p. f C) Learns - J l ['3' ‘.- Depesirs fEJ Reset-w:- ratio I f r J I 1 E 5 if u] p: The primer; meme u? an eeenerrdr. system are to amewer the quesréens [5'13 Hk'hflt, hCIW, es-‘Ld tor WhU-rn ten produce If: [BI when, where. and wit}; to preduee IC‘. 'nnw te JJ'Lflxi-JniIE ere-fits- 31751. minimize tin-1e spent making tiflrtgfs'1‘ [DJ hmu feet. he-w n1 writ, and hole; often te- pretence I IE] where elees the money 50 and hue: ean these in sneiety get some L- Se. fIn ureter Ie :edLICe er elimrnsre erewdtng e-ut. I “expansionary: {meal peiieje can be eecnmpanied I r by. II. Ifil :Irl- .Lli gym—ameme' |.'-"-.t an 1I1E1'E'JSE En “er-em" '-1 ts end'. x“ . .. . . ,. _ [E] r: deereaee tr. 1:» e.Htm:n:1 F 11g .5 Jet.” .i. budge: Sen-mt ex15:s when __ E {CI expansionary n1ur.etar}-'_:1<;~lic_=.' 5’ LA] Lhe teta] amount that the government :' a (DJ centreerienarje monetary pelicy ewes are given tirne :s pesitive ft _ ._--_”. Il-i‘. an increase in the interest rate {E} government age-refine exceeds tea [a E ceileeriens fer a green period 9. at -=- {C} experts exeeed imp-ens in a greet". _re1r__.fl. - " _ _ ._.._ . - ——IfD} 1mperis exceem‘p—Gflé Ln Ede en year '11 a [15.) the tetal seiner-It Thar ttteenvernmem J1: E” 3' . i merge: a eiL-‘erl time is mega rive-- ' —""' E- :1 m - :- I' _. . N'. ... The money supply will increase as :1 result of 4111' Wh: :15: of- -I'I.e 1'ollo11'ing' 15 the most "1'.'-:el 1" to be _I which of the following? ' (If. e-'I:le .zer ant to growth 1.11 the economy? .I' "1.9-1; .—‘I. decreaseiIrEl'E-r'eouired'resefi'e fee—.1: ' "‘_'— .- 1.51 penomg on edueatlon and t- amine, {B} .511: increase in :he discount :ete I 115} Inereeses' 11'. capitol [C1 The selling of bonds l:I_I.' 1i1e Federei 1C} Increases in the 1'.nleres1:ete Reserve [D] EXpenoilures on reeee 1.151 and ED] .-‘I1n increase in 1l'.e tremor. o5 o'epusils 151.11 development must be held i:I'_' banks ‘" 1E: increased tapeezij.‘ utilization ..— .1.-I Open :n: rket operations 1n 1o Vin-j '-l'I.e sale ..'-1 gouei-Imc -n: see-£11511: er». "r‘1r.‘l his follow— -. 1 ._ n__',.L-.'-.--11-- _I:1_|_Jli(:1_-.5.I;'3._-1-;i1-_-::1:11'.111'n'.e-te gE‘uItT-zl-y JtlI'I-“i 'h'lt fl:1-..'t‘.l.'-.*E 1.111355”: :v".fi l .E. W" '..-.':r|i“"‘ [Li-"1 hk" ““' _.;_I;. will ;'-'...1j1' 1J'I ll-I'II-f [11. I .pet :i-nd c:11tp1.11__"- wi'.he.i._'I11:Itl'I1=._T . l‘1". 1'11e I'1'1'er“11'-'1e1"1 -.I"_'1e-L'.1.'£ n11: -.I.'o-:1".' .1oo'.11 11:.11rzieirjr.g -I-.'_I..-'- _.e-.',:11I'.- :'.1=.n'-_er-..:l .1'. en .1.+.e-:{I.13:~:le1.'e| £53.— Tifs-"1:131 l'ull- en1plo1'1nen1 out-pot exceeds equilib- _1'111n'1 outputlr.‘...l"e:erreIgeto1:1:perld11=-.11'e. -"'Ke1nesien_Cross _1_1_1o:el __ ‘1'. 11“.] ['1 3.1113. l'1" 111—111}; _______ [31 | . LTl. end l"I-" only lL'} leneil l‘v’ only I ll—Jl ll {-111.13 ' i1:I‘.l_'-' [31} injections exceed leakages :'E1'_l e :ecessionarj: 551p exists {Cl an inflationary gap exists . ' ' '1 '- ' "e‘t:1:'|s .'rI'- i. 11.....e'11-1n13 _ it” 93'1””35'5 LE"1“] ”"' '“ L _ _ ""-—'- """' ""' 1E} Keynes. woule. 1_'1|1 t1Ir._ ’E'Ise 1:1 51.11'ernx11n15penetinj1: . II.....;.-”-.. x“ :7 . _.' l .. . .. . no.‘ The Keynes-.1111 .515: 1:111'1'e1s 1.511 horizontal at 1131:: levels of output (Ea: 1-111'1111113 et all price levels (Cl- posiilvel'. sloped at low priee levels In [DJ nen etisME‘ I_. slo “Iped 1'11 h.1I-rl'tr_1:i1:e|o1els ' {El pos1tiI: el_.' sloped :11 .11] on. put IeI.-' ele .rmen: | fL‘TCF‘ajSE‘S l3:- mce- cummnnlm called I . | {PH crow-4.195; cuLL+ . If B;- zero p 311:]; effectiveness - {C} ‘11:? Limcfiugh eff-9c? [FF -- I | 5‘). According to chi." them-j: m" rational expecta- ticmE, an Increasc in cfcwercmcnl Lficreaae .3.[}&Fji'1L:Sl'TF:l'E-JI_‘-n the . ".j-th of cm;- 1'0 spending m | W”: IUI? .‘I'IE:II wit]: WI figu r-L— above Unwing? I | [51.2 .11 sustainable increzec :11 real' GDP I I'HJ "-..-:: increase in :15 . [C'I .-'Lcm::1ter-.'al.‘jn_g decrease In :‘D . _ {DJ :4. decrease Ln _-"..5 IE1- .-‘apa:rh_1: end inaction ...
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