samplefinal - Section: 1 / MULTIPLE CHOICE QUESTIONS...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Section: 1 / MULTIPLE CHOICE QUESTIONS INSTRUCTIONS: PLACE A CHECK MARK NEXT TO THE CORRECT ANSWER. ___ 1. In the classical model with fixed output, the supply and demand for goods and services are balanced by: __ A. government spending. __ B. taxes. __ C. fiscal policy. __ D. the interest rate. ___ 2. The natural rate of unemployment is: __ A. the average rate of unemployment around which the economy fluctuates. __ B. about 10 percent 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 is constant. __ B. velocity is constant. __ C. inflation rate is constant. __ D. real interest rate is constant. ___ 4. In a small open economy, if exports equal $5 billion and imports equal $7 billion, then there is a trade _______ and ________ net foreign investment. __ A. deficit; negative __ B. surplus; negative __ C. deficit; positive __ D. surplus; positive ___ 5. In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade ________ and ________ net foreign investment. __ A. deficit; negative __ B. surplus; positive __ C. deficit; positive __ D. surplus; negative 1 ___ 6. An appreciation of the real exchange rate in a small open economy could be the result of: __ A. an increase in government spending. __ B. an increase in taxes. __ C. a decrease in the world interest rate. __ D. the expiration of an investment tax-credit provision. ___ 7. The aggregate demand curve tells us possible: __ A. combinations of M and Y for a given value of P . __ B. combinations of M and P for a given value of Y . __ C. combinations of P and Y for a given value of M . __ D. results if the Federal Reserve reduces the money supply. ___ 8. If the short-run aggregate supply curve is horizontal, then a change in the money supply will change _______ in the short run and change _______ in the long run. __ A. only prices; only output __ B. only output; only prices __ C. both prices and output; only prices __ D. both prices and output; both prices and output 2 ___ 9. (Exhibit: Shift in Aggregate Demand) In this graph, initially the economy is at point E, with price P and output fi. Aggregate demand is given by curve AD , and SRAS and LRAS represent, respectively, short-run and long-run aggregate supply. Now assume that the aggregate demand curve shifts so that it is represented by AD 1 . The economy moves first to point ________ and then, in the long run, to point ________. __ A. A; D __ B. D; A __ C. C; B __ D. B; C __ 10. An interpretation of why the IS curve slopes downward and to the right is that as income rises, national saving rises, and this increase drives the interest rate: __ A. down, thereby decreasing investment....
View Full Document

This note was uploaded on 02/03/2012 for the course ECON 302 taught by Professor Quan during the Spring '11 term at Canadian University College.

Page1 / 19

samplefinal - Section: 1 / MULTIPLE CHOICE QUESTIONS...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online