macro95ex9 - Chapter 9 The IS-LM/AD-AS Model A General...

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

View Full Document Right Arrow Icon
Chapter 9 The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis T Multiple Choice Questions 1. The FE line shows the level of output at which the _____ market is in equilibrium. (a) Goods (b) Asset (c) Labor (d) Money Answer: C Level of difficulty: 1 Section: 9.1 2. The FE line is vertical because the level of output at full employment doesn’t depend on the (a) real wage rate. (b) level of employment. (c) marginal product of labor. (d) real interest rate. Answer: D Level of difficulty: 1 Section: 9.1 3. Which of the following would shift the FE line to the right? 4. Which of the following would shift the FE line to the left?
Image of page 1

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

View Full Document Right Arrow Icon
Chapter 9 The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis 133 5. The IS curve shows the combinations of output and the real interest rate for which 6. An increase in the money supply would cause the FE line to (a) shift to the right. (b) shift to the left. (c) remain unchanged. (d) remain unchanged if Ricardian equivalence holds; otherwise, shift to the right. Answer: C Level of difficulty: 1 Section: 9.1 7. An adverse supply shock would cause the FE line to 8. Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to _____ and shifts the IS curve _____. 9. A decline in expected future output would cause the IS curve to
Image of page 2
134 Abel/Bernanke • Macroeconomics, Fifth Edition
Image of page 3

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

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern