Exam 15: The Influence of Monetary and Fiscal Policy on Aggregate Demand

In a small open economy with a flexible exchange rate,an expansionary fiscal policy will cause which of the following to happen?

When the Bank of Canada lowers the growth rate of the money supply,which of the following must it take into account?

Which of the following is an effect of an increase in government purchases?

Most economists believe that a cut in tax rates will do which of the following?

Which of the following is characteristic of aggregate demand in Canada?

In a small open economy with perfect capital mobility,if exchange rates are fixed,how could aggregate demand be increased?

Which of the following is an effect of an increase in the interest rate?

Assume the money market is initially in equilibrium.If the price level increases,according to liquidity-preference theory,what is in excess and for how long?

Why and in what way are fiscal policy lags different from monetary policy lags?

According to liquidity-preference theory,if the quantity of money supplied is greater than the quantity demanded,what will happen to the interest rate and the quantity of money demanded?

Which of the following best defines the marginal propensity to consume (MPC)?

Which of Keynes's theories does liquidity preference refer to?

According to liquidity-preference theory,what action taken by the Bank of Canada would shift the money-supply curve?

An increase in the money supply shifts the aggregate-supply curve right.

According to liquidity-preference theory,why is the money-demand curve downward sloping?

When making a case against active stabilization policies,what do some economists argue?

The theory of liquidity preference assumes that the nominal supply of money is determined by which of the following?

According to liquidity-preference theory,what is the opportunity cost of holding money?

Which of the following is consistent with the Keynesian theory?

Which of the following does NOT explain the slope of the aggregate-demand curve?