A lower raise b increase lower c increase raise d

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Quiz 10,11,12 - Copy

A lower raise B increase lower C increase raise D lower lower Chapter 122 from ECON 362A at Binghamton University

Question 9   1 . The Pigou effect :
A. 
B. is generally accepted as adequate proof that the economy must be able to correct itself .
C. suggests that as prices fall and real money balances rise , consumers should feel less wealthy but spend more .
D. suggests that as prices fall and real money balances rise , consumers should feel less wealthy and spend less .
Answer:  A.   suggests that as prices fall and real money balances rise , consumers should feel wealthier and spend more .
Question 10   The debt - deflation hypothesis explains the fall in income as a consequence of unexpected deflation transferring wealth ______ , and that creditors have ______ propensity to consume than debtors .
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Question 1   The U.S. recession of 2001 can be explained in part by a declining stock market and terrorist attacks . Both of these shocks can be represented in the IS – LM model by shifting the ______ curve to the _ _____.
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Question 2   One policy response to the U.S. economic slowdown of 2001 was tax cuts . This policy response can be represented in the IS – LM model by shifting the ______ curve to the _ _____.
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Question 3   One policy response to the U.S. economic slowdown of 2001 was to increase money growth . This policy response can be represented in the IS – LM model by shifting the ______ curve to the _ _____.
A. LM ; left
B. IS ; right
C. 
D. IS ; left
Answer:  C.   LM ; right
Question 4   When bond traders for the Federal Reserve seek to decrease interest rates , they ______ bonds , which shifts the _ _____ curve to the right .
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Question 5   The aggregate demand curve generally slopes downward and to the right because , for any given money supply M a higher price level P causes a ______ real money supply M / P , which __ _ _ __ the interest rate and ______ spending .
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Question 6   An economic change that does not shift the aggregate demand curve is a change in :
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Question 7   A decrease in the price level shifts the _ _____ curve to the right , and the aggregate demand curve _ _____.
A. 
B. LM : shifts to the right
C. IS ; does not shift
D. IS ; shifts to the right
Answer:  A.   LM ; does not shift
Question 8   If the short - run IS – LM equilibrium occurs at a level of income below the natural level of output , then in the long run the price level will ______ , shifting the ______ curve to the right and returning output to the natural level .
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A. lower; raise B. increase; lower C. increase; raise D. lower; lower.
Chapter 12(2) Question 1 The U.S. recession of 2001 can be explained in part by a declining stock market and terrorist attacks. Both of these shocks can be represented in the ISLMmodel by shifting the ______ curve to the ______.
Question 2 One policy response to the U.S. economic slowdown of 2001 was tax cuts. This policy response can be represented in the ISLMmodel by shifting the ______ curve to the ______.
Question 3 One policy response to the U.S. economic slowdown of 2001 was to increase money growth. This policy response can be represented in the ISLMmodel by shifting the ______ curve to the ______.
Question 4 When bond traders for the Federal Reserve seek to decrease interest rates, they ______ bonds, which shifts the ______ curve to the right. A. sell; ISB. sell; LMC. buy; LM
D. buy; IS
Question 5 The aggregate demand curve generally slopes downward and to the right because, for any given money supply Ma higher price level P causes a ______ real money supply M/P, which ______ the interest rate and ______ spending.
Question 6 An economic change that does not shift the aggregate demand curve is a change in:
Question 7 A decrease in the price level shifts the ______ curve to the right, and the aggregate demand curve ______.
Question 8 If the short-run ISLMequilibrium occurs at a level of income below the natural level of output, then in the long run the price level will ______, shifting the ______ curve to the right and returning output to the natural level. A. decrease; ISB. increase; LMC. increase; ISD. decrease; LM
Question 9 1.The Pigou effect:
Question 10 The debt-deflation hypothesis explains the fall in income as a consequence of unexpected deflation transferring wealth ______, and that creditors have ______ propensity to consume than debtors.

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