A crowding out effects b no crowding out effects c no

This preview shows page 106 - 109 out of 113 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Organizational Behavior: Science, The Real World, and You
The document you are viewing contains questions related to this textbook.
Chapter 2 / Exercise 4
Organizational Behavior: Science, The Real World, and You
Nelson/Quick
Expert Verified
a. crowding out effects b. no crowding out effects c. no increase in the demand for goods and services d. a decrease in aggregate demand 33. In a small open economy with perfect capital mobility, if exchange rates are fixed, how could aggregate demand be increased? a. by increasing government expenditures b. by increasing tax rates c. by increasing the money supply d. by decreasing the money supply 34. In a small open economy with perfect capital mobility, if the Bank of Canada chooses to fix the value of the Canadian dollar, what will a contractionary monetary policy do? a. It will have no effect. b. It will shift the AD curve to the left. c. It will shift the AD curve to the right. 106
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Organizational Behavior: Science, The Real World, and You
The document you are viewing contains questions related to this textbook.
Chapter 2 / Exercise 4
Organizational Behavior: Science, The Real World, and You
Nelson/Quick
Expert Verified
Junjie Liu – Econ 105 Practice Multiple Choice d. It will shift both the AD curve and the short-run AS curve to the left. 35. If the Bank of Canada allows the exchange rate to vary freely, which of the following effects will an expansionary fiscal policy have? a. It will cause a large and permanent rightward shift of the AD curve. b. It will cause a large and permanent leftward shift of the AD curve. c. It will have no permanent effect on the position of the AD curve, but it will cause interest rates to permanently increase. d. It will have no permanent effect on either the position of the AD curve or the interest rate. 36. How do tax cuts and government expenditure affect aggregate demand? a. Both shift aggregate demand right. b. Both shift aggregate demand left. c. Tax cuts shift aggregate demand right; government expenditure shifts aggregate demand left. d. Tax cuts shift aggregate demand left; government expenditure shifts aggregate demand right. 37. What are the effects of a change in taxes on consumption and aggregate demand? a. If taxes increase, consumption increases and aggregate demand shifts right. b. If taxes increase, consumption decreases and aggregate demand shifts left. c. If taxes decrease, consumption increases and aggregate demand shifts left. d. If taxes decrease, consumption decreases and aggregate demand shifts right. 38. If households view a tax cut as being temporary, how does the tax cut affect aggregate demand? a. It has no affect on aggregate demand. b. It has more of an effect on aggregate demand than if households view it as permanent. c. It has the same effect on aggregate demand than if households view the cut as permanent. d. It has less of an effect on aggregate demand than if households view the cut as permanent. 39. If the federal government cuts spending to balance the federal budget, how can the Bank of Canada act to prevent unemployment and recession while maintaining the balanced budget? a. by increasing the money supply b. by decreasing the money supply c. by raising taxes d. by cutting expenditures 107
Junjie Liu – Econ 105 Practice Multiple Choice 40. Which of the following policies would someone who wants the government to follow an active stabilization policy recommend when the economy is experiencing unemployment above the natural rate?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture