The best example of a negative supply shock to the economy would be

unexpectedly higher resource prices

If the world price of copper exceeds the domestic (U.S) price of copper, we would expect

the U.S to be a net exporter of copper

The "crowding out" effect is the result of

increasing interest rates from expansionary fiscal policy

Suppose the economy is operating beyond full employment. Which of the following is true?

unemployment will not lower but there will be more inflation

Which of the following monetary policies would lessen the impact of expansionary fiscal policy

selling treasury securities to commercial banks

If an American firm moves a plant from the U.S to Brazil

U.S GDP falls & Brazil's GDP rises

In a recession, expansionary monetary policy is designed to

increase AD, which will increase GDP & increase employment

Automatic stabilizers in the economy serve an important role in

lessening the impact of the recession

In a recession, which of the following will have the greater positive impact on rGDP

Gov't increases spending with no changes in taxes

An increase in investor optimism will impact the loanable funds market by

An increase in demand, increasing the interest rate

Which of the following is an accurate statement of the money supply in the U.S?

The most liquid measure of money is M1

If Blu-ray players are normal goods, an increase in household income will

increase the equilibrium Quantity & increase the Price

How will a plan to decrease taxes for consumers and increased gov't spending affect GDP & PL

GDP rises and the price level rises

Which of the following would be most preferred by supply-side economists

a tax credit on capital investment

To deflate nominal GDP, you must

divide nominal GDP by the GDP deflator

studbud

Diagnostic Macro Exam

24 termsStudBud Administration82 plays

Imported from external platform

Flashcards24 cardsFPractice quizPHost liveL

Questions 24

Answers

1
The best example of a negative supply shock to the economy would be
an increase in the money supply
a decrease in the real interest rate
unexpectedly higher resource prices
a decrease in government spending
2
CPI increases by 2 % & your nominal income increases by 8%, your real income has
increased by 6%
decreased by 6%
increased by 4%
decreased by 4%
3
If the world price of copper exceeds the domestic (U.S) price of copper, we would expect
the demand for U.S copper to fall
dollar will depreciate relative to other world currencies
the U.S to be a net exporter of copper
the U.S to impose a tariff on imported copper
4
Which of the following is the source of the supply of loanable funds?
banks and mutual funds
savers
the stock market
net exports
5
The "crowding out" effect is the result of
increasing interest rates from expansionary monetary policy
decreasing interest rates from contractionary fiscal policy
a depreciating dollar versus other currencies
increasing interest rates from expansionary fiscal policy
6
Suppose the economy is operating beyond full employment. Which of the following is true?
further increases in AD will lower price level
unemployment rate is higher than the natural rate.
unemployment will not lower but there will be more inflation
the short run AS curve is horizontal
7
Which of the following monetary policies would lessen the impact of expansionary fiscal policy
decreasing the value of the domestic currency
lowering the income tax rate
lowering the discount rate
selling treasury securities to commercial banks
8
If an American firm moves a plant from the U.S to Brazil
U.S GDP falls & Brazil's GDP rises
U.S GDP falls & Brazil's GDP falls
U.S GDP rises & Brazil's GDP falls
U.S GDP falls and U.S GNP rises
9
Which of the following is a tool used by the FED to increase the money supply
a lower personal income tax rate
a lower investment income tax rate
a lower discount rate
a higher reserve ratio
10
The spending multiplier is often smaller than predicted because of
lower interest rates
increasing net exports
rising price levels
lower taxes
11
Grocery checkers lose job to self-serve check out stations. What type of unemployment it this?
frictional
discourage
structural
cyclical
12
In a recession, expansionary monetary policy is designed to
decrease AD and real prices will decrease
increase unemployment, but low prices negate this effect
increase AD, which will increase GDP & increase employment
keep interest rates high, which attracts foreign investment
13
Automatic stabilizers in the economy serve an important role in
increasing the length of the business cycle
lessening the impact of the recession
balancing the budget
increasing the budget surplus in a recession
14
Excess reserves in the banking system will increase if
the FED sells treasury securities to commercial banks
the checking deposits increase
the discount rate is increased
the reserve ratio is increased
15
Which of the following resources are examples of capital?
a barrel of crude oil
a registered nurse
an electric typewriter
a share of corporate stock
16
In a recession, which of the following will have the greater positive impact on rGDP
Gov't decreases spending with no changes in taxes
gov't decreases spending & equals a decrease in taxes
Gov't increases spending with no changes in taxes
gov't increases spending & increases same amount in taxes
17
An increase in investor optimism will impact the loanable funds market by
An increase in demand, increasing the interest rate
an increase in the supply, lowering interest rate
a decrease in demand, increasing the interest rate
a decrease in supply, decreasing the interest rate
18
Which of the following is an accurate statement of the money supply in the U.S?
the money supply is backed by gold
the least liquid measure of money is M2
The most liquid measure of money is M1
M1 is larger than M3
19
If Blu-ray players are normal goods, an increase in household income will
increase the equilibrium quantity & the change in price fall
decrease the equilibrium quantity & decrease price
increase the equilibrium Quantity & increase the Price
decrease the equilibrium quantity and increase the price
20
The phillips curve represents the relationship between
investment & real interest rate
inflation & money supply
inflation & unemployment
unemployment & the money supply
21
How will a plan to decrease taxes for consumers and increased gov't spending affect GDP & PL
GDP falls and the price level rises
GDP rises and price level falls
GDP rises and the price level rises
GDP falls and the price level falls
22
Which of the following would be most preferred by supply-side economists
a tax credit on capital investment
higher welfare payments
lower taxes on household income
increased government spending
23
To deflate nominal GDP, you must
multiply nominal GDP by the GDP deflator
divide real GDP by the GDP deflator
divide nominal GDP by the GDP deflator
divide nominal GDP by real GDP
24
A bank has $1000 in demand deposits & $250 in RR, what is the RRR? How much ER? What is the MM?
75%, $750, M=1/4
25%, $750, M=4
25%, $750, M=1/4
75%, $250, M=4

Diagnostic Macro Exam Flashcards | StudBud