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

Which of the following shifts money demand to the right?

Supply-side economists believe that lowering taxes has what effects?

How does a reduction in the money supply by the Bank of Canada make owning stocks less attractive?

Which of the following shifts money demand to the right?

Unemployment insurance and welfare programs work as automatic stabilizers.

According to the crowding-out effect,how does a decrease in government spending affect the interest rate and investment spending?

If the Bank of Canada maintains a fixed exchange rate,which of the following effects will an expansionary fiscal policy have?

If the MPC = 0.9,what is the government purchases multiplier?

Which of the following shifts aggregate demand to the right?

Which of the following factors mostly determines the lag problem associated with monetary policy?

Which of the following tends to make aggregate demand shift right farther than the amount that government expenditures increase?

In which of the following situations do people want to hold less money?

What do open-market purchases do to the price level and real GDP?

An increase in government spending initially and primarily shifts which curve in what direction?

How does the interest rate change when the price level falls and when the money supply falls?

What does fiscal policy primarily affect in the short run?

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

Figure 15-2 -Refer to the Figure 15-2.In a closed economy,which of the following would cause the aggregate demand curve to shift from AD to AD*?

According to the theory of liquidity preference,which of the following variables adjusts to balance the supply and demand for money?

Suppose the economy is in long-run equilibrium.Parliament passes regulations that make it more costly to conduct business,so the long-run aggregate-supply curve shifts $80 billion to the left.At the same time,government purchases increase by $60 billion.If the MPC equals 0.75 and the crowding-out effect is $70 billion,what would we expect to happen in the long run to real GDP and the price level?