The demand for money increases when national income increases because

spending on goods andservices increases

The consumer price index measures which of the following?

The change of the weighted prices of goods and services

Commercial banks can create money by

Lending excess reserves tocustomers

If labor productivity increases, what's the effect on on the real GDP and the price level?

Increase Real GDP and Decrease the Price Level

Which of the following is an example of structural unemployment?

an auto worker being replaced by a robot

Which of the following will result in the greatest increase in aggregate demand?

A $100 increase in government expenditures

Which of the following relationships is illustrated by a short-run Phillips curve?

As inflation increases unemployment decreases

An increase in which of the following will increase the value of the spending multiplier?

The marginal propensity to consume

If the FED wishes to use monetary policy to reinforce Congress fiscal policy changes, it should

gov't spending increases and the FED lowers interest rates

Which of the following is a basic tenet of classical economic analysis?

The economy is self-correcting to full employment.

If the FED wishes to use monetary policy to support Congress’ fiscal policy changes, it should

Increase money supply if the government increases spending

If the FED lowers the reserve requirement, which of the following would most likely occur?

Businesses will purchasemore factories and equipment.

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AP Macro FLVS Review Quiz 1-20 Part 1

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Questions 20

Answers

1
If the economy is in recession, which fiscal policy is most effective in stimulating output?
Government spendingincreases.
The Federal Reserve sells bonds on the open market.
Personal income taxes are increased.
Government spending decreases.
2
The long-run aggregate supply curve is likely to shift to the right when there is
an increase in the federal budget deficit
an increase in the cost of productive resources
a decrease in the money supply
an increase in productivity
3
The demand for money increases when national income increases because
interest rates increase
the budget deficit increases
spending on goods andservices increases
the money supply increases
4
If other things are held constant, an increase in United States imports will
Decrease GDP
increase AD
Increase GDP
Increase AS
5
The consumer price index measures which of the following?
The change of the weighted prices of goods and services
gross domestic product
Inflation corrected for changes in the real
The change over time of the weighted wholesale price index
6
Commercial banks can create money by
Lending excess reserves tocustomers
BuyingTreasury bills from the Federal Reserve
Maintaining a 100 percent reserve requirement
Sending vault cash to the Federal Reserve
7
If labor productivity increases, what's the effect on on the real GDP and the price level?
Decrease Real GDP and Increase the Price Level
Increase Real GDP and Decrease the Price Level
Increase Real GDP and Increase the Price Level
No effect on Real GDP and Increase the Price Level
8
If nominal GDP grew by 11 percent and real GDP grew by 4 percent, inflation would be
-7%
7%
11%
8%
9
Which of the following will most likely result from a decrease in government spending?
An increase in output
A decrease in aggregate demand
An increase in the price level
An increase in employment
10
what is the appropriate fiscal policy, and monetary policies to fight demand pull inflation?
contractionary and tight money
expansionary and easy money
contractionary and easy money
expansionary and tight money
11
An increase in which of the following is most likely to improve our standard of living?
Size of the population
Level of taxation
Size of the labor force
Productivity of labor
12
Which of the following is an example of structural unemployment?
a college grad searching for her first job
a computer operator being let go because of a slow economy
someone quits their job because they don't like it
an auto worker being replaced by a robot
13
Which of the following will result in the greatest increase in aggregate demand?
A $10 increase in government expenditures
A $100 increase in government expenditures
A $100 increase in taxes
A $100 decrease in taxes
14
Which of the following relationships is illustrated by a short-run Phillips curve?
As inflation increases unemployment decreases
GDP decreases and unemployment derceases
inflation increases and unemployment increases
employment increases and GDP increases
15
According to the Keynesian model, which of the following would increase aggregate demand?
An increase in the discount rate
A decrease in unemployment compensation payments
An increase in investment
A decrease in government expenditures on public works
16
An increase in which of the following will increase the value of the spending multiplier?
The supply of money
Equilibrium output
Personal income tax rates
The marginal propensity to consume
17
If the FED wishes to use monetary policy to reinforce Congress fiscal policy changes, it should
gov't spending increases and the FED lowers interest rates
gov't increases spending, increases the required reserve
govt lowers taxes, the FED sells bonds
gov't spending increases, the FED raises discount rate
18
Which of the following is a basic tenet of classical economic analysis?
Inflationis not a serious economic problem.
The economy is self-correcting to full employment.
Savingis usually greater than investment.
The economy is in equilibrium at less than full employment.
19
If the FED wishes to use monetary policy to support Congress’ fiscal policy changes, it should
Increase money supply if the government increases spending
increase interest rates when spending is increased
decrease interest rates when spending is decreased
decrease the money supply when spending is increased
20
If the FED lowers the reserve requirement, which of the following would most likely occur?
Imports will rise, decreasing the trade deficit.
Businesses will purchasemore factories and equipment.
The rate of saving will increase.
The budget deficit will increase.

AP Macro FLVS Review Quiz 1-20 Part 1 Flashcards | StudBud