The FOMC meets approximately eight times per year and at these meetings they a. set a target federal funds interest rate. b. set a target money supply. c. set a target employment target. d. All of the above e. None of the above ANSWER A
Date: September 10th, 2020
If the interest rate goes up, what happens to the investment demand curve? A) It shifts to the right. B) It shift to the left. C) It stays put. D) We cannot tell. ANSWER C
Date: September 10th, 2020
Intermediate targeting the money supply is preferable if there is a(n) a. increase in the severity of supply shocks. b. unstable money demand function. c. low interest elasticity of money demand. d. difficulty in the measurement of money demand. e. none of the above. ANSWER C
Date: September 10th, 2020
Which of the following factors will not determine output and employment in the classical model? a. Taxes that affect the incentive to work or hire labor b. The level of government spending c. The quantity of capital d. Preferences for leisure e. None of the above ANSWER B
Date: September 10th, 2020
Assuming that C + I + G > C + Ir + G, then a. aggregate demand exceeds than output. b. unplanned inventories are negative. c. there is an unintended inventory accumulation. d. Both a and c e. None of the above ANSWER D
Date: September 10th, 2020
Real gross national product is a. the same as national income if there were no depreciation and taxes. b. always less than national income. c. always greater than real gross domestic product. d. always less than nominal gross national product. ANSWER A
Date: September 10th, 2020
If the central bank targets the interest rate, it a. must decrease interest rates in response to an increase in money demand. b. rules out the possibility of runaway inflation. b. can lead to runaway inflation if maintained too rigidly. d. Both a and c e. Both b and c ANSWER B
Date: September 10th, 2020
The production function is concave in capital because A) the contribution to production of each additional unit of capital decreases. B) the marginal product of capital is increasing. C) the marginal product of labor is decreasing. D) the cost of loans increases with their quantity. ANSWER A
Date: September 10th, 2020
Assuming that money demand is completely interest insensitive, the a. LM schedule will be horizontal. b. LM schedule will be vertical. c. IS schedule is vertical. d. IS schedule is horizontal. ANSWER B
Date: September 10th, 2020
Inflation may impose little, if any, cost on the economy, if ________. A) laws against excessive price increases are enforced effectively B) the government subsidizes menu costs C) price increases are fully anticipated D) the Fisher effect holds true E) the rate of price increase is so slow that people do not feel compelled to […]
Date: September 10th, 2020
