Question 1

A permanent negative supply shock leads to ________ output ________.

Accepted Answer

A) higher;in both the short and long runs 
B) higher;in the short run but not in the long run 
C) lower;in both the short and long runs 
D) lower;in the short run but not in the long run 
A) higher;in both the short and long runs 
B) higher;in the short run but not in the long run 
C) lower;in both the short and long runs 
D) lower;in the short run but not in the long run

Question 2

An autonomous monetary policy easing temporarily ________ real interest rates and ________ aggregate output in the short run,but in the long run real interest rates and aggregate output return to the equilibrium levels.

Accepted Answer

A) reduces;raises 
B) reduces;lowers 
C) increases;lowers 
D) increases;raises 
A) reduces;raises 
B) reduces;lowers 
C) increases;lowers 
D) increases;raises

Question 3

Suppose the economy is producing at the natural rate of output.An increase in consumer and business confidence will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.

Accepted Answer

A) an increase;an increase 
B) a decrease;a decrease 
C) no change;an increase 
D) no change;a decrease 
A) an increase;an increase 
B) a decrease;a decrease 
C) no change;an increase 
D) no change;a decrease

Question 4

According to aggregate demand and supply analysis,America's involvement in the Vietnam War had the effect of

Accepted Answer

A) increasing aggregate output,lowering unemployment,and raising the inflation. 
B) decreasing aggregate output,lowering unemployment,and lowering the inflation. 
C) increasing aggregate output,raising unemployment,and raising the inflation. 
D) decreasing aggregate output,raising unemployment,and lowering the inflation. 
A) increasing aggregate output,lowering unemployment,and raising the inflation. 
B) decreasing aggregate output,lowering unemployment,and lowering the inflation. 
C) increasing aggregate output,raising unemployment,and raising the inflation. 
D) decreasing aggregate output,raising unemployment,and lowering the inflation.

Question 5

Suppose the U.S.economy is operating at potential output.A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.

Accepted Answer

A) no change;an increase 
B) no change;a decrease 
C) an increase;an increase 
D) a decrease;a decrease 
A) no change;an increase 
B) no change;a decrease 
C) an increase;an increase 
D) a decrease;a decrease

Question 6

In the long-run equilibrium

Accepted Answer

A) output is a function of autonomous expenditures. 
B) inflation is a function of past inflation. 
C) inflation equals potential output. 
D) output equals potential output. 
A) output is a function of autonomous expenditures. 
B) inflation is a function of past inflation. 
C) inflation equals potential output. 
D) output equals potential output.

Question 7

Everything else held constant,aggregate demand increases when

Accepted Answer

A) net exports decrease. 
B) taxes increase. 
C) planned investment spending increases. 
D) the money supply decreases. 
A) net exports decrease. 
B) taxes increase. 
C) planned investment spending increases. 
D) the money supply decreases.

Question 8

The long-run aggregate supply curve is

Accepted Answer

A) a vertical line through the non-inflationary rate of output. 
B) a vertical line through the current level of output. 
C) a vertical line through the natural rate level of output. 
D) a horizontal line through the current level of output. 
A) a vertical line through the non-inflationary rate of output. 
B) a vertical line through the current level of output. 
C) a vertical line through the natural rate level of output. 
D) a horizontal line through the current level of output.

A permanent negative supply shock leads to output .

An autonomous monetary policy easing temporarily real interest rates and aggregate output in the short run,but in the long run real interest rates and aggregate output return to the equilibrium levels.

Suppose the economy is producing at the natural rate of output.An increase in consumer and business confidence will cause in real GDP in the long run and in inflation in the long run,everything else held constant.

According to aggregate demand and supply analysis,America's involvement in the Vietnam War had the effect of

Suppose the U.S.economy is operating at potential output.A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause in real GDP in the long run and in inflation in the long run,everything else held constant.

In the long-run equilibrium

Everything else held constant,aggregate demand increases when

The long-run aggregate supply curve is

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Web 1:financial Crises in Emerging Market Economies

Web 2:the Islm Model

Web 3:nonbank Finance

Web 4:financial Derivatives

Web 5:conflicts of Interest in the Financial Services Industry

Filters

Exam 22: Aggregate Demand and Supply Analysis

A permanent negative supply shock leads to ________ output ________.

An autonomous monetary policy easing temporarily ________ real interest rates and ________ aggregate output in the short run,but in the long run real interest rates and aggregate output return to the equilibrium levels.

Suppose the economy is producing at the natural rate of output.An increase in consumer and business confidence will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.

According to aggregate demand and supply analysis,America's involvement in the Vietnam War had the effect of

Suppose the U.S.economy is operating at potential output.A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.

In the long-run equilibrium

Everything else held constant,aggregate demand increases when

The long-run aggregate supply curve is

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Web 1:financial Crises in Emerging Market Economies

Web 2:the Islm Model

Web 3:nonbank Finance

Web 4:financial Derivatives

Web 5:conflicts of Interest in the Financial Services Industry

Filters

A permanent negative supply shock leads to output .

An autonomous monetary policy easing temporarily real interest rates and aggregate output in the short run,but in the long run real interest rates and aggregate output return to the equilibrium levels.

Suppose the economy is producing at the natural rate of output.An increase in consumer and business confidence will cause in real GDP in the long run and in inflation in the long run,everything else held constant.

Suppose the U.S.economy is operating at potential output.A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause in real GDP in the long run and in inflation in the long run,everything else held constant.