ECON 2301 Week 5 Quiz | Assignment Help | Central Texas College
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Question 1
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According to the classical model, which of the following would double
if the quantity of money doubled?
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Answers:
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a.
prices but not nominal income
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b.
nominal income but not prices
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c.
both prices and nominal income
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d.
neither prices nor nominal income
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Question 2
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Aggregate demand shifts right when the Federal Reserve
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Answers:
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a.
raises personal income taxes.
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b.
increases the money supply.
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c.
institutes an investment tax
credit.
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d.
All of the above are correct.
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Question 3
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Which of the following is correct?
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Answers:
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a.
During economic contractions most
firms experience rising profits.
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b.
When real GDP falls, the rate of
unemployment generally rises.
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c.
Short run fluctuations in economic
activity happen only in developing countries.
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d.
Recessions come at irregular
intervals and are easy to predict.
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Question 4
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An increase in household saving causes consumption to
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Answers:
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a.
rise and aggregate demand to
increase.
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b.
fall and aggregate demand to
increase.
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c.
rise and aggregate demand to
decrease.
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d.
fall and aggregate demand to
decrease.
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Question 5
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Which of the following fall during a recession?
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Answers:
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a.
both retail sales and employment
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b.
retail sales but not employment
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c.
employment but not retail sales
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d.
neither employment nor retail sales
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Question 6
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A decrease in government spending initially and primarily shifts
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Answers:
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a.
aggregate demand to the right.
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b.
aggregate supply to the right.
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c.
aggregate demand to the left.
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d.
neither aggregate demand nor
aggregate supply.
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Question 7
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Using the liquidity-preference model, when the Federal Reserve
increases the money supply,
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Answers:
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a.
the aggregate-demand curve shifts
to the left.
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b.
the short-run aggregate-supply
curve shifts to the right.
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c.
the equilibrium interest rate
decreases.
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d.
the quantity of goods and services
demanded is unchanged for a given price level.
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Question 8
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An example of an automatic stabilizer is
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Answers:
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a.
unemployment benefits.
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b.
a lowering of interest rates by the
Fed.
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c.
a decrease in tax rates in response
to a recession.
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d.
a decrease in money demand.
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Question 9
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A goal of monetary policy and fiscal policy is to
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Answers:
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a.
enhance the shifts in aggregate demand
and thereby increase economic growth
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b.
offset shifts in aggregate demand
and thereby stabilize the economy.
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c.
enhance the shifts in aggregate
demand and thereby create fluctuations in output and employment.
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Question.10
Refer to Figure 34-1. At an interest rate of 4 percent, there is an
excess
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Answers:
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a.
demand
for money equal to the distance between points b and c.
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b.
supply
of money equal to the distance between points b and c.
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c.
supply
of money equal to the distance between points a and b.
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d.
demand
for money equal to the distance between points a and b.
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d.
offset the shifts in aggregate
demand and thereby eliminate unemployment.
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India