Question

QUESTION 53 6.66 points Save Answer Which of the following is not a determinant of the long-run level of real GDP? O a. available stock of human capital. O b. available technology O c. the price level. O d. the amount of capital used by firms. QUESTION 54 6.66 points Save Answer When households find themselves holding too much money, they respond by O a. purchasing interest-earning financial assets and interest rates fall. O b. holding the extra money and interest rates rise. O c. selling interest-earning financial assets, which eliminates the excess supply of money. O d. purchasing interest-earning financial assets and interest rates rise.

Answer 1

Note: According to HOMEWORKLIB POLICY only first four MCQ can be answered. Please post the other questions in separate post. 53) The major determinants of GDP are capital formation, human resources, natural resources and technology From the given determinant, price level will not affect the long run level of real GDP. Hence, option c is correct. 54) When households have too much money, they demand more interest-earning financial assets and due to increase in the demand of financial assets the interest rates earning from financial assets will fall. Hence, option a “purchasing interest-earning financial assets and interest rates fall”. 55) As shown in given graph, the quantity of money demanded is increase shift MD curve rightward. Also, nominal interest rate is also increasing from ri to r2. As the AD curve remain same the investment here is constant and expected rate of inflation is rising. Hence, option d is correct.

56) To reduce the effects of large government expenditures creates on interest rate, the Federal reserve could decrease the money supply by selling bonds. Hence, option c is correct.