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Ch11 Quiz &euml;&not;&cedil;&igrave;&nbsp;œ&igrave;&sect;€

# Ch11 Quiz ë¬¸ì œì§€

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Question 1 Question 1 1. If the IS curve is given by Y = 1,700 – 100 r , the money demand function is given by ( M/P ) d = Y – 100 r , the money supply is 1,000, and the price level is 2, then if the money supply is raised to 1,200, equilibrium income rises by: Answer 10 points Question 2 Question 2 1. According to the IS-LM model, when the government increases taxes and government purchases by equal amounts: Answer 10 points Question 3 Question 3 1. If neither investment nor consumption depends on the interest rate, then the IS curve is ______ and ______ policy has no effect on output. Answer 10 points Question 4

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Question 4 1. The increase in income in response to a fiscal expansion in the IS-LM is: Answer 10 points Question 5 Question 5 1. If MPC = 0.75 (and there are no income taxes but only lump-sum taxes) when T decreases by 100, then the IS curve for any given interest rate shifts to the right by:

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Unformatted text preview: Answer 10 points Question 6 Question 6 1. A tax cut combined with tight money, as was the case in the United States in the early 1980s, should lead to a: Answer 10 points Question 7 Question 7 1. If the government wants to raise investment but keep output constant, it should: Answer 10 points Question 8 Question 8 1. If the short-run IS-LM equilibrium occurs at a level of income above the natural level of output, in the long run the ______ will ______ in order to return output to the natural level. Answer 10 points Question 9 Question 9 1. A shift in the aggregate demand curve, starting from long-run equilibrium, which increases output in the short run, will ______ in the long run, as compared to a short-run equilibrium. Answer 10 points Question 10 Question 10 1. A decrease in the price level shifts the ______ curve to the right, and the aggregate demand curve ______, Answer...
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Ch11 Quiz ë¬¸ì œì§€

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