When the interest rate increases, people will adjust their precautionary demand for money A) downward or upward depending upon the actual supply of money. B) upward. C) not at all. D) downward. ANSWER D
Date: September 2nd, 2020
The average price of a share of stock on the New York Stock Exchange falls by 30 percent. Other things being equal, we would expect A) a shift up of the consumption function. B) an increase in the marginal propensity to consume. C) a decrease in the marginal propensity to consume. D) a shift down […]
Date: September 2nd, 2020
If the Fed buys bonds from a private bank, ________. A) the Fed’s total liabilities will remain unaffected B) the Fed’s total assets will remain unaffected C) the private bank’s composition of assets will change D) the private bank’s total assets will increase ANSWER C
Date: September 2nd, 2020
In the above figure, the long-run equilibrium real GDP is A) $10 trillion. B) $11 trillion. C) $12.trillion D) not displayed. ANSWER B
Date: September 2nd, 2020
If consumers’ confidence in the economy rises A) aggregate demand will shift rightward and the price level will rise. B) aggregate demand will shift leftward and the price level will fall. C) aggregate demand will shift rightward and the price level will fall. D) aggregate demand will shift leftward and the price level will rise. […]
Date: September 2nd, 2020
The liquidity of money refers to A) the amount of gold it is backed by. B) how quickly it can be disposed of without high transaction costs. C) asymmetric information. D) the standard of deferred payments and how quickly those payments can be made. ANSWER B
Date: September 2nd, 2020
Which of the following statements is TRUE? A) APC + APS < 1 B) APC + APS + MPC + MPS = 1 C) APC + MPS = 1 D) APC + APS = 1 ANSWER D
Date: September 2nd, 2020
Some economists believe that financing deficit spending by increasing taxes will lead to a lower level of national consumption and a higher level of national savings than deficit spending. The reason is A) that people do not realize that taxes have increased also. B) the interest rate on the debt will increase. C) people will […]
Date: September 2nd, 2020
Which of the following factors would economists consider “key” to economic development? A) policies that promote consumption expenditures by households B) establishing a system of property rights C) expansionary monetary policy D) All of the above are correct. ANSWER B
Date: September 2nd, 2020
Assuming all else equal, if a household is optimistic about future income, it is likely to cause: A) the current credit supply curve of the household to shift to the left. B) an upward movement along the current credit supply curve of the household. C) the current credit supply curve of the household to shift […]
Date: September 2nd, 2020
