Quiz5_PINK_With_Key - Econ 252 Spring 2011 Quiz 5 PINK...

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Econ 252 Spring 2011 Quiz 5 PINK VERSION 1. In which of the following cases does the aggregate-demand curve shift to the right? a. The price level rises, causing the interest rate to fall. b. The price level falls, causing the interest rate to fall. c. The money supply increases, causing the interest rate to fall. d. The money supply decreases, causing the interest rate to fall. 2. In the short run, an increase in government expenditures a. raises the price level, but not real GDP. b. raises real GDP, but not the price level. c. raises real GDP and the price level. d. raises neither real GDP nor the price level. 3. As aggregate demand shifts right along the aggregate supply curve, a. inflation and unemployment are higher. b. inflation is higher and unemployment is lower. c. unemployment is higher and inflation is lower. d. unemployment and inflation are lower. 4. In the short run , following an open market purchase of securities by the Fed, interest rates will ______ and investment will _______. a. rise; rise b. fall; rise c. fall; fall d. rise; fall 5. Money (and monetary policy) is ________ in the short run and _______ in the long run. a. neutral; not neutral b. not neutral; neutral c. not neutral; not neutral d. neutral; neutral 6. Most economists use the aggregate demand and aggregate supply model primarily to analyze a. short-run fluctuations in the economy. b.
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This note was uploaded on 08/02/2011 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue University-West Lafayette.

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Quiz5_PINK_With_Key - Econ 252 Spring 2011 Quiz 5 PINK...

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