Throughout the 1980s, the Federal Reserve a. primarily targeted M1. b. primarily targeted M2. c. returned to targeting the federal funds rate. d. began targeting inflation. ANSWER B
Date: September 10th, 2020
In the national income accounts, investment includes all of the following EXCEPT: a. stock market purchases. b. inventories. c. purchases of equipment. d. new home sales. ANSWER A
Date: September 10th, 2020
International evidence on the relationship of per capita income and the saving rate suggests that ________. A) a high level of income per person requires a high saving rate B) a high saving rate guarantees a high level of income per person C) a high saving rate might result in a high level of income […]
Date: September 10th, 2020
Within the IS-LM curve model, an increase in government spending financed by printing money will always a. have no impact on income. b. lower income and raise the interest rate. c. increase the interest rate. d. lower the interest rate and increase income. e. increase income. ANSWER E
Date: September 10th, 2020
The first industry to use interchangeable parts in the U.S. was (a) machine tools. (b) guns. (c) cotton textiles. (d) watches. ANSWER (b)
Date: September 10th, 2020
Explain the intuition behind why the aggregate demand curve is downward sloping. Why does an increase in the money supply shift the aggregate demand curve to the right? What will be an ideal response? ANSWER According to the quantity theory, holding the velocity and supply for money constant, a lower price level means that […]
Date: September 10th, 2020
Fiscal policy involves manipulating ________. A) the supply of money B) consumption spending C) federal subsidies and minimum wage values D) government spending and taxes ANSWER D
Date: September 10th, 2020
Briefly explain why changes in government spending or taxes do not have independent effects on aggregate demand. What does shift the aggregate demand curve in the classical model? What will be an ideal response? ANSWER Government spending and taxes do not have independent effects on aggregate demand because of the adjustment of the interest […]
Date: September 10th, 2020
Within the IS-LM curve model, a decline in expectations would a. lower income and the interest rate. b. increase income and lower the interest rate. c. lower income, but leave the interest rate unchanged. d. lower the interest rate, but leave income unchanged. e. lower income and increase the interest rate. ANSWER A
Date: September 10th, 2020
The largest component of GDP in the US is typically: a. government purchases. b. social securtity. c. consumption. d. investment. e. net exports. ANSWER C
Date: September 10th, 2020
