Econ 232 Spring 2006
Which of the following will occur
if there is an increase in money supply?
()a The IS curve shifts and the
economy moves along the LM curve.
()b Both the IS and LM curves shift.
()c Output will change due to shift in
Semester 2, 2010
Tutorial 1 answers.
1. Suppose that the economy is characterized by the I following behavioural equations:
C = 160 + 0.6 YD
G = 150
T = 100
a. Equilibrium GDP (Y)
The equilibrium cond
Which of the following will cause a reduction in aggregate output?
a reduction in N
a reduction in K
a worsening in
all of the above
If Kt+1/N = Kt/N, we know that:
saving per worker equals
1. Which of the following is NOT in the labor force?
Those who worked full time, but in a family business
Those temporarily laid off who will be recalled soon
All of the above
For the question below, assum
CH 10 - REVIEW QUESTIONS
1. The short-run aggregate supply curve is horizontal at:
A) a level of output determined by aggregate demand.
B) the natural level of output.
C) the level of output at which the economy's resources are fully employed.
D) a fixed
()a the wage offer that will end a laborstrike.
()b the lowest wage firms are allowed by
law to pay workers.
()c the wage that ensures a laid-off
individual will wait for re-hire, rather
than find another job.
()d the wage tha
In the aggregate supply relation, a reduction in
current output causes:
()a an increase in the expected price level and an
upward shift of the AS curve.
()b a reduction in the current price level.
()c an increase in the mar
Questions 1-3 are based on the following information. Robinson Crusoe (RC) and Friday are the only inhabitants of
Dream-Island. Consider the following series of transactions:
1. Friday catches 250 kg of fish and sells them to RC