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When the supply and demand for money are expressed in a graph
with the interest rate on the vertical axis and the quantity of
money on the horizontal axis, an increase in the price level
- none of these answers
- shifts money demand to the right and increases the interest
rate.
- shifts money demand to the right and decreases the interest
rate.
- shifts money demand to the left and increases the interest
rate.
A multiple-choice question with one possible
answer.(Required)
If the marginal propensity to consume
MPC is 0. 5, the value of the multiplier is
- 0.75
- 7.5
- 4.
- 2
A multiple-choice question with one possible
answer.(Required)
The Permanent Income and Life-Cycle Hypotheses imply that
- The primary determinant of permanent income is current
consumption.
- The primary determinant of current consumption is permanent
income.
- Consumers are more likely to save if they are uncertain about
the future.
- Consumers generally favor current consumption over future
consumption.
A multiple-choice question with one possible
answer.(Required)
In the long run, inflation is caused
by
- governments that print too much money.
- governments that raise taxes so high that it increases the cost
of doing business and, hence, raises prices.
- banks that have market power and refuse to lend money.
- increases in the price of inputs, such as labor and oil.
A multiple-choice question with one possible
answer.(Required)
If the money supply grows 5 per cent,
and real output grows 2 per cent, prices should rise by
- more than 5 per cent.
- 5 per cent.
- 10 per cent.
- none of these answers.
A multiple-choice question with several possible
answers.(Required)
Examples of fiat money are
- paper euros.
- paper JPYs.
- gold.
- silver coins.
A multiple-choice question with one possible
answer.(Required)
The natural rate of unemployment is
likely to fall if
- Unemployment benefits increase.
- Income tax increases.
- More training is available for the unemployed.
- Geographical immobility increases.
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