A shift away from expenditures on domestic goods and a shift toward expenditures on foreign goods when the domestic price level increases is known as A) the interest rate effect. B) demand side inflation. C) the real-balance effect. D) the open economy effect. ANSWER D
Date: September 2nd, 2020
In the classical model, what is the result of an increase in aggregate demand? A) The price level increases, and real GDP remains constant. B) The price level decreases, and real GDP remains constant. C) Real GDP increases, and the price level remains constant. D) Real GDP decreases, and the price level remains constant. […]
Date: September 2nd, 2020
In the short run, expansionary fiscal policy usually will A) decrease the price level and decrease real GDP. B) increase the price level and increase real GDP. C) decrease the price level and increase real GDP. D) increase the price level and decrease real GDP. ANSWER B
Date: September 2nd, 2020
Contractionary fiscal policy will most likely A) involve increasing government spending. B) reduce the price level. C) involve cutting taxes. D) raise real GDP. ANSWER B
Date: September 2nd, 2020
Which of the following factors is likely to lead to an increase in the quantity demanded of pens? A) A fall in the price of paper B) A fall in the incomes of all consumers C) A rise in the incomes of all consumers D) A fall in the price of pens ANSWER D
Date: September 2nd, 2020
Refer to the above figure. Line EBD is called A) the saving function. B) the consumption function. C) the 45-degree line. D) aggregate demand. ANSWER C
Date: September 2nd, 2020
Which of the following factors is expected to cause the demand curve for coffee to shift to the right? A) An increase in the supply of coffee due to better weather B) A higher personal tax on the income of all consumers C) A fall in the manufacturing cost of coffee D) A higher tax […]
Date: September 2nd, 2020
Money as a medium of exchange I. Facilitates the exchange of goods II. Reduces the incentive to barter A) I only B) II only C) Both I and II D) Neither I nor II ANSWER C
Date: September 2nd, 2020
The use of money as a medium of exchange I. lowers transaction costs. II. permits more specialization. A) I only B) II only C) Neither I nor II D) Both I and II ANSWER D
Date: September 2nd, 2020
According to the classical model, desired saving is A) affected by the money illusion at low income levels. B) identical to the demand for saving at each level of real GDP. C) a function of real GDP. D) equal to desired investment. ANSWER D
Date: September 2nd, 2020
