Refer to the above figure. Suppose that the economy was originally at point A, and then it reached point C by means of a fiscal policy action. Which of the following is correct? A) Point C is both a short-run equilibrium and a long-run equilibrium that could have been attained through an increase in government […]
Date: September 2nd, 2020
In the above figure, saving will equal zero when real disposable income equals A) 500. B) 600. C) 60. D) 0. ANSWER B
Date: September 2nd, 2020
Which of the following represents a function of money? A) standard of deferred payment B) medium of exchange C) unit of accounting D) all of the above ANSWER D
Date: September 2nd, 2020
In the above figure, when real disposable income equals 600 A) there is dissaving. B) real disposable income exceeds consumption. C) consumption is less than disposable income. D) consumption equals real disposable income. ANSWER D
Date: September 2nd, 2020
Holding nominal money balances constant, a decrease in the price level A) causes the real value of the money balances to increase, thereby increasing the interest rate. B) generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in total planned real expenditures. C) causes the real […]
Date: September 2nd, 2020
Money is defined as A) a by product of a barter economy. B) any financial instrument that is backed by gold. C) anything people generally accept in exchange for goods and services. D) a person’s net worth. ANSWER C
Date: September 2nd, 2020
Which of the following pairs of goods is likely to be considered substitutes? A) A Nokia cell phone and a Nokia cell phone charger B) Coffee and sugar C) Printers and printing ink D) A Ford car and public transportation ANSWER D
Date: September 2nd, 2020
What is TRUE of the aggregate supply curve in the classical model? A) The aggregate supply curve is downward sloping. B) The aggregate supply curve is vertical. C) The aggregate supply curve is horizontal. D) The aggregate supply curve is not determined by the level of employment. ANSWER B
Date: September 2nd, 2020
Without an accepted medium of exchange, people A) have to specialize in one area of production. B) have to resort to barter in order to exchange goods and services. C) have to rely on gold or silver in order to exchange goods and services. D) can efficiently obtain goods and services. ANSWER B
Date: September 2nd, 2020
An indirect effect of an increase in the price level works through A) changes in trade balances as domestic goods become more expensive, causing interest rates to move in the opposite direction from the change in the exchange rate. B) interest rates as people save more as the higher prices make their money balances less […]
Date: September 2nd, 2020
