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ECON304 - Final_Practice - F10

ECON304 - Final_Practice - F10 - Sonoma State University...

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Sonoma State University Department ofEconomics EeN 304 Florence Bouvet Fall 2009 Practice final Multiple Choice Questions 1. Inthe classical model with fixed output, the supply and demand for goods and services are balanced by a. Government spending b. taxes c. fiscal policy tal interest rate 2. The natural rate of unemployment is: ® The average rate of unemployment around which the economy fluctuates b. About 10percent of the labor force c. A rate that never changes d. The transition of individuals between employment and unemployment 3. the one to one relation between the inflation rate and the nominal interest rate, the Fisher effect, assumes that the a. money supply isconstant b. velocity isconstant c. inflation rate isconstant (Ii. real interest rate isconstant 4. the aggregate demand curve tells us possible a. combinations of Yand M for a given value of P b. combinations ofM and P for agiven value ofY ~ combinations of Pand Y foragiven value of M d. results ifthe Federal Reserve reduces the money supply 5. Ifthe short-run aggregate supply curve ishorizontal, then a change inthe money supply will change (compared with the initial equilibrium) inthe short run and change inthe long run. ~). Only output; only prices
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