Question 1

If the bond prices increase the nominal interest rate:

Accepted Answer

A) fluctuates. 
B) remains constant. 
C) increases. 
D) decreases. 
A) fluctuates. 
B) remains constant. 
C) increases. 
D) decreases.

Question 2

What are the short and long-run effects of a temporary one-period increase in government spending in the general IS-MP-PC (AD-AS) model?

Accepted Answer

A temporarily increase in government spe

Question 3

In the IS-LM model, if public spending, G, declines, then in the new equilibrium:

Accepted Answer

A) output declines. 
B) output increases 
C) the real interest rate rises. 
D) all of the above. 
A) output declines. 
B) output increases 
C) the real interest rate rises. 
D) all of the above.

Question 4

In a liquidity trap fiscal policy can increase output.

Accepted Answer

A) True 
 B)False

Question 5

According to the IS-MP-PC model, an inflationary monetary policy causes

Accepted Answer

A) an upward shift of the AS curve. 
B) an upward shift of the AD curve. 
C) a downward shift of the AS curve. 
D) none of the above. 
A) an upward shift of the AS curve. 
B) an upward shift of the AD curve. 
C) a downward shift of the AS curve. 
D) none of the above.

Question 6

In the IS-LM model, if government spending decreases and money supply increases, the nominal interest rate:

Accepted Answer

A) increases. 
B) declines. 
C) remains constant. 
D) fluctuate. 
A) increases. 
B) declines. 
C) remains constant. 
D) fluctuate.

Question 7

According to the general MP rule of the IS-MP-PC model, a 1% increase in the inflation rate lead the central bank to:

Accepted Answer

A) lower the real interest rate by 1%. 
B) not change the nominal interest rate. 
C) raise the real interest rate by more than 1%. 
D) raise the nominal interest rate by more than 1%. 
A) lower the real interest rate by 1%. 
B) not change the nominal interest rate. 
C) raise the real interest rate by more than 1%. 
D) raise the nominal interest rate by more than 1%.

Question 8

In the IS-LM model the inflation rate is:

Accepted Answer

A) rising. 
B) falling. 
C) fluctuating. 
D) zero. 
A) rising. 
B) falling. 
C) fluctuating. 
D) zero.

Question 9

If the government increases public spending, then the real interest rate goes up.

Accepted Answer

A) True 
 B)False

Question 10

According to the general MP rule of the IS-MP-PC model, a 1% increase in both the current inflation rate and the inflation target of the central bank will cause the central bank to:

Accepted Answer

A) raise the nominal interest rate by 1%. 
B) raise the real interest rate by 1%. 
C) keep the nominal interest rate constant. 
D) none of the above. 
A) raise the nominal interest rate by 1%. 
B) raise the real interest rate by 1%. 
C) keep the nominal interest rate constant. 
D) none of the above.

Question 11

According to the IS-MP-PC model, a lower level of government spending causes

Accepted Answer

A) lower GDP. 
B) higher inflation. 
C) higher GDP. 
D) none of the above. 
A) lower GDP. 
B) higher inflation. 
C) higher GDP. 
D) none of the above.

Question 12

According to the IS-MP-PC model, a lower level of taxation causes

Accepted Answer

A) a temporarily lower GDP. 
B) lower inflation. 
C) a temporarily higher GDP. 
D) none of the above. 
A) a temporarily lower GDP. 
B) lower inflation. 
C) a temporarily higher GDP. 
D) none of the above.

Question 13

In the IS-LM model the equilibrium level of output depends on:

Accepted Answer

A) technological progress. 
B) the depreciation rate. 
C) taxation. 
D) all of the above. 
A) technological progress. 
B) the depreciation rate. 
C) taxation. 
D) all of the above.

Question 14

What are the effects of an increase in taxation in the IS-LM model?

Accepted Answer

An increase in taxation reduces househol

Question 15

According to the Phillips curve, a decrease in expected inflation generates:

Accepted Answer

A) a decrease in deflation. 
B) an increase in inflation. 
C) no change in the inflation rate. 
D) a decrease in inflation 
A) a decrease in deflation. 
B) an increase in inflation. 
C) no change in the inflation rate. 
D) a decrease in inflation

Question 16

According to the IS-MP-PC model, an increase in the monetary policy sensitivity parameter ρ causes

Accepted Answer

A) an upward shifts of the AD curve. 
B) no change in the AD curve. 
C) a downward shift in the AD curve. 
D) it depends. 
A) an upward shifts of the AD curve. 
B) no change in the AD curve. 
C) a downward shift in the AD curve. 
D) it depends.

Question 17

The IS curve gives the level of output and of the real interest rate that balances the money market.

Accepted Answer

A) True 
 B)False

Question 18

According to the IS-MP-PC model, an increase in the target inflation rate causes

Accepted Answer

A) an upward shifts of the AD curve. 
B) no change in the AD curve. 
C) a downward shift in the AD curve. 
D) it depends. 
A) an upward shifts of the AD curve. 
B) no change in the AD curve. 
C) a downward shift in the AD curve. 
D) it depends.

Question 19

In the IS-MP model, as public spending increases, money supply:

Accepted Answer

A) remains constant. 
B) falls. 
C) rises. 
D) fluctuates. 
A) remains constant. 
B) falls. 
C) rises. 
D) fluctuates.

Question 20

According to the IS-LM model, in a liquidity trap a decrease in public spending causes the GDP to:

Accepted Answer

A) increase. 
B) decline. 
C) remain constant. 
D) fluctuate. 
A) increase. 
B) decline. 
C) remain constant. 
D) fluctuate.

If the bond prices increase the nominal interest rate:

What are the short and long-run effects of a temporary one-period increase in government spending in the general IS-MP-PC (AD-AS) model?

In the IS-LM model, if public spending, G, declines, then in the new equilibrium:

In a liquidity trap fiscal policy can increase output.

According to the IS-MP-PC model, an inflationary monetary policy causes

In the IS-LM model, if government spending decreases and money supply increases, the nominal interest rate:

According to the general MP rule of the IS-MP-PC model, a 1% increase in the inflation rate lead the central bank to:

In the IS-LM model the inflation rate is:

If the government increases public spending, then the real interest rate goes up.

According to the general MP rule of the IS-MP-PC model, a 1% increase in both the current inflation rate and the inflation target of the central bank will cause the central bank to:

According to the IS-MP-PC model, a lower level of government spending causes

According to the IS-MP-PC model, a lower level of taxation causes

In the IS-LM model the equilibrium level of output depends on:

What are the effects of an increase in taxation in the IS-LM model?

According to the Phillips curve, a decrease in expected inflation generates:

According to the IS-MP-PC model, an increase in the monetary policy sensitivity parameter ρ causes

The IS curve gives the level of output and of the real interest rate that balances the money market.

According to the IS-MP-PC model, an increase in the target inflation rate causes

In the IS-MP model, as public spending increases, money supply:

According to the IS-LM model, in a liquidity trap a decrease in public spending causes the GDP to:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters

Exam 6: Macroeconomics Without Microeconomic Foundations

If the bond prices increase the nominal interest rate:

What are the short and long-run effects of a temporary one-period increase in government spending in the general IS-MP-PC (AD-AS) model?

In the IS-LM model, if public spending, G, declines, then in the new equilibrium:

In a liquidity trap fiscal policy can increase output.

According to the IS-MP-PC model, an inflationary monetary policy causes

In the IS-LM model, if government spending decreases and money supply increases, the nominal interest rate:

According to the general MP rule of the IS-MP-PC model, a 1% increase in the inflation rate lead the central bank to:

In the IS-LM model the inflation rate is:

If the government increases public spending, then the real interest rate goes up.

According to the general MP rule of the IS-MP-PC model, a 1% increase in both the current inflation rate and the inflation target of the central bank will cause the central bank to:

According to the IS-MP-PC model, a lower level of government spending causes

According to the IS-MP-PC model, a lower level of taxation causes

In the IS-LM model the equilibrium level of output depends on:

What are the effects of an increase in taxation in the IS-LM model?

According to the Phillips curve, a decrease in expected inflation generates:

According to the IS-MP-PC model, an increase in the monetary policy sensitivity parameter ρ causes

The IS curve gives the level of output and of the real interest rate that balances the money market.

According to the IS-MP-PC model, an increase in the target inflation rate causes

In the IS-MP model, as public spending increases, money supply:

According to the IS-LM model, in a liquidity trap a decrease in public spending causes the GDP to:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters