Homework Answers
15.) Option D is correct i.e. more, rise
16.) Option D is correct i.e the monetary policy curve shifted downward.
Reason :- It seems Fed is using an autonomous easing of monetary policy which shifts the monetary policy curve downward.
17.) Option D is correct i.e. aggregate demand to increase.
Reason :- In autonomous easing of monetary policy, the curve shifted downward which shows aggregate demand increase.
18.) Option D is correct i.e. Inflation rate and the level of aggregate output supplied.
Reason :- The aggregate supply curve shows rhe relationship between aggregate price level and the quantity of aggregate output in the economy.
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15. (4 points) The Taylor Principle states that central banks raise nominal rates by than any...
A central bank that does NOT follow the Taylor principle will fail to raise nominal interest...
A central bank that does NOT follow the Taylor principle will fail to raise nominal interest rates by more than the increase in expected inflation. As a result, the monetary policy curve is -------- sloping and the aggregate demand curve is --- sloping. A) upward; upward OB) upward; downward OC) downward; upward OD) downward; downward
In February 2014, South Africa had an inflation interest rates in January and is expected to increase or maintain the interest rates through 2014
QUESTION 4 In February 2014, South Africa had an inflation interest rates in January and is expected to increase or maintain the interest rates through 2014. The South African central bank is pursuing rate of 5.9 % and an unemployment rate of 24.1%. The South African central bank raised a(n): contractionary monetary policy to contain inflation. expansionary monetary policy to contain inflation. expansionary monetary policy to fight unemployment. contractionary monetary policy to fight unemployment QUESTION 5 When the economy is sluggish, the Fed will: raise interest rates, which...
Macroeconomic Multiple Choice Questions Answer All 10 Questions* 1) If the Central Bank of Kuwait puts...
Macroeconomic Multiple Choice Questions
Answer All 10 Questions*
1) If the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at full employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is...
32. The rational expectations hypotheses implies that discretionary macroeconomic policy is: a. relatively effective in both...
32. The rational expectations hypotheses implies that discretionary macroeconomic policy is: a. relatively effective in both the short run and long run b. relatively effective in the short run but ineffective in the long run c. relatively ineffective in both the short run and long run d. effective in the long run since decision makers will continually make predictable, systematic errors 33. The modern view of the Phillips curve suggests that a. when inflation is less than anticipated, unemployment will...
20. Banks decide to raise the interest rate they pay on checking accoun action would A)...
20. Banks decide to raise the interest rate they pay on checking accoun action would A) increase money demand, shifting the LM curve up and to the ci B) increase money demand, shiftino the IM curve down and to the C) decrease money demand, shifting the M curve up and to the tem D) decrease money demand, shifting the LM curve down and to cing accounts from 1% to 2%. This curve down and to the right. & the LM...
38.39,40 Question 38 (2 points) When potential GDP increases. 1) the AS curve shifts rightward. 2)...
38.39,40
Question 38 (2 points) When potential GDP increases. 1) the AS curve shifts rightward. 2) there is a movement up along the AS curve. 3) the AS curve shifts leftward. 0 4) there is a movement down along the AS curve. Question 39 (2 points) Which of the following produces a movement along the aggregate demand curve? 1) a change in foreign incomes 2) a change in the price level 3) a change in monetary policy 4) a change...
Which would most likely shift the aggregate supply curve? A change in the prices of _____....
Which would most likely shift the aggregate supply curve? A change in the prices of _____. domestic products foreign products financial assets resources A decrease in aggregate demand in the short run will reduce _____. both real output and the price level the price level and increase the real domestic output the real domestic output and have no effect on the price level the price level and have no effect on real domestic output The economy's long-run AS curve assumes...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
17. (4 points) An autonomous easing of monetary policy will cause A) the quantity of aggregate...
17. (4 points) An autonomous easing of monetary policy will cause A) the quantity of aggregate demand to increase. B) the quantity of aggregate demand to decrease. C) aggregate demand to decrease. D) aggregate demand to increase
Note: There is only one correct option. 1. To get the equilibrium level of income in...
Note: There is only one correct option.
1. To get the equilibrium level of income in the simple Keynesian model [1] we multiply the autonomous aggregate spending by the multiplier 12 we add all the autonomous aggregate spending component and subtract the multiplier [3] we divide the multiplier by aggregate demand [4] we multiply the interest rate by the multiplier 2. An increase in the tax rate in the Keynesian model will 1 shift the aggregate spending curve upwards in...
A central bank that does NOT follow the Taylor principle will fail to raise nominal interest rates by more than the increase in expected inflation. As a result, the monetary policy curve is -------- sloping and the aggregate demand curve is --- sloping. A) upward; upward OB) upward; downward OC) downward; upward OD) downward; downward
Macroeconomic Multiple Choice Questions
Answer All 10 Questions*
1) If the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at full employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is...
20. Banks decide to raise the interest rate they pay on checking accoun action would A) increase money demand, shifting the LM curve up and to the ci B) increase money demand, shiftino the IM curve down and to the C) decrease money demand, shifting the M curve up and to the tem D) decrease money demand, shifting the LM curve down and to cing accounts from 1% to 2%. This curve down and to the right. & the LM...
38.39,40
Question 38 (2 points) When potential GDP increases. 1) the AS curve shifts rightward. 2) there is a movement up along the AS curve. 3) the AS curve shifts leftward. 0 4) there is a movement down along the AS curve. Question 39 (2 points) Which of the following produces a movement along the aggregate demand curve? 1) a change in foreign incomes 2) a change in the price level 3) a change in monetary policy 4) a change...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
17. (4 points) An autonomous easing of monetary policy will cause A) the quantity of aggregate demand to increase. B) the quantity of aggregate demand to decrease. C) aggregate demand to decrease. D) aggregate demand to increase
Note: There is only one correct option.
1. To get the equilibrium level of income in the simple Keynesian model [1] we multiply the autonomous aggregate spending by the multiplier 12 we add all the autonomous aggregate spending component and subtract the multiplier [3] we divide the multiplier by aggregate demand [4] we multiply the interest rate by the multiplier 2. An increase in the tax rate in the Keynesian model will 1 shift the aggregate spending curve upwards in...
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