Homework Answers
a) "E"
it helps in reducing the impct of the recession.
b) "B"
It will increase the real GDP, the aggregate demand and the price level in the market.
c) "D"
The interest rate will increase, price level will decrease, output will decrease,and aggregate demand will fall too.
d) "C"
Selling securities to the banks will reduce the effect of the monetary policy.
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1o). Automatic stabilizer in che conomy serve an important role in (A) increasing the length of...
because it Monetary policy that decreases the interest rate is called A. contractionary monetary policy, reduces...
because it Monetary policy that decreases the interest rate is called A. contractionary monetary policy, reduces AD. B. contractionary monetary policy; reduces SRAS. C. expansionary monetary policy; increases AD. D. expansionary monetary policy; increases SRAS. QUESTION 11 Other things the same, a fall in an economy's overall level of prices tends to A. raise both the quantity demanded and supplied of goods and services. B. raise the quantity demanded of goods and services, but lower the quantity supplied. C. lower...
An increase in the price level will A) shift the aggregate demand curve to the left.
7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand curve to the right. C) move the economy up along the aggregate demand curve. D) move the economy down along the aggregate demand curve. 8) Expansionary monetary policy involves A) reducing money supply and lowering taxes B) increasing money supply to decrease interest rate C) increasing government spending and cutting money supply D) increasing the interest rate and increasing taxes 9) Long-run macroeconomic equilibrium occurs when A) aggregate demand...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a....
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a. Tax revenues fall as real GDP decreases. b. Congress decides to cut spending on national defense. c. Congress cuts individual income tax rates. d. Tax revenues rise after Congress raises corporate tax rates. QUESTION 7 When a country's economy is producing at a level that is less than its potential GDP, the standardized employment deficit will show a ________ than the actual deficit. a....
Which of the following is an example of an expansionary fiscal policy? a. The US government increasing corporate taxes b...
Which of the following is an example of an expansionary fiscal policy? a. The US government increasing corporate taxes b. The US government lowering spending in order to balance the budget c. The US government lowering corporate and individual taxes d. The Fed lowering interest rates Which of the following is an example of contractionary monetary policy? a. The Fed conducting open market purchase b. The Fed conducting open market sale c. The US government increases taxes d. The Fed...
QUESTION 9 An automatic stabilizer is O a tool that helps reduce the effect of a fall in demand for a firm's pr...
QUESTION 9 An automatic stabilizer is O a tool that helps reduce the effect of a fall in demand for a firm's product. O a tool that ensures imports always equal exports in an economy a feature of the economy that reduces its sensitivity to shocks. O a feature of the economy that reduces its dependence on international trade. QUESTION 10 Which of the following is NOT a way for the Fed to increase aggregate demand? O Lowering the discount...
In an economy where the money supply and aggregate demand have been decreased by the Central...
In an economy where the money supply and aggregate demand have been decreased by the Central Bank, you know that the Central Bank is using 答案选项组 a contractionary monetary policy. an expansionary monetary policy. a loose monetary policy. follow expansionary fiscal policy How does monetary policy affect the market? 答案选项组 Monetary policy has a more of an impact on consumption than investment. Monetary policy has a more of an impact on government spending than investment. Monetary policy has an indirect...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
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...
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...
because it Monetary policy that decreases the interest rate is called A. contractionary monetary policy, reduces AD. B. contractionary monetary policy; reduces SRAS. C. expansionary monetary policy; increases AD. D. expansionary monetary policy; increases SRAS. QUESTION 11 Other things the same, a fall in an economy's overall level of prices tends to A. raise both the quantity demanded and supplied of goods and services. B. raise the quantity demanded of goods and services, but lower the quantity supplied. C. lower...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
QUESTION 9 An automatic stabilizer is O a tool that helps reduce the effect of a fall in demand for a firm's product. O a tool that ensures imports always equal exports in an economy a feature of the economy that reduces its sensitivity to shocks. O a feature of the economy that reduces its dependence on international trade. QUESTION 10 Which of the following is NOT a way for the Fed to increase aggregate demand? O Lowering the discount...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
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...
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...
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