Question 1

-Consider Figure 13.3.If there is a positive inflation shock,ceteris paribus,the economy would move from point __________ to point __________.

Accepted Answer

A) c;d 
B) c;b 
C) c;e 
D) b;e 
E) Not enough information is given. 
A) c;d 
B) c;b 
C) c;e 
D) b;e 
E) Not enough information is given.

Question 2

Central banks always use monetary rules to dictate monetary policy.

Accepted Answer

A) True 
 B)False

Question 3

In the short-run model,the steady state is characterized by:

Accepted Answer

A)    . 
B)    . 
C)    . 
D) all of the above 
E) none of the above 
A)    . 
B)    . 
C)    . 
D) all of the above 
E) none of the above

Question 4

A monetary policy rule may contain which of the following?

Accepted Answer

A) short-term output 
B) the inflation rate 
C) the unemployment rate 
D) all of the above 
E) none of the above 
A) short-term output 
B) the inflation rate 
C) the unemployment rate 
D) all of the above 
E) none of the above

Question 5

-Consider Figure 13.3.If rebels in Nigeria,a major oilproducing country,temporarily hijack privately owned and operated oil wells,this would be characterized in the aggregate supply curve as a movement from point __________ to point __________.

Accepted Answer

A) c;b 
B) c;e 
C) c;d 
D) b;e 
E) Not enough information is given. 
A) c;b 
B) c;e 
C) c;d 
D) b;e 
E) Not enough information is given.

Question 6

The central bank often deviates from simple policy rules because:

Accepted Answer

A) the rules are always wrong. 
B) they have new and more detailed information. 
C) they are ordered to by the president. 
D) they have no discretion. 
E) the federal government is more interested in unemployment. 
A) the rules are always wrong. 
B) they have new and more detailed information. 
C) they are ordered to by the president. 
D) they have no discretion. 
E) the federal government is more interested in unemployment.

Question 7

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point __________ to point __________;eventually the economy returned to the steady state at point __________.

Accepted Answer

A) c;a;b 
B) c;b;a 
C) c;d;c 
D) a;b;c 
E) Not enough information is given. 
A) c;a;b 
B) c;b;a 
C) c;d;c 
D) a;b;c 
E) Not enough information is given.

Question 8

During the __________,the actual federal funds rate was substantially lower than the rate suggested by the simple Taylor rule.

Accepted Answer

A) early 1960s 
B) late 1990s 
C) early to mid-1980s 
D) early 1990s 
E) None of the above is correct. 
A) early 1960s 
B) late 1990s 
C) early to mid-1980s 
D) early 1990s 
E) None of the above is correct.

Question 9

Which of the following countries does not adopt an explicit inflation target?

Accepted Answer

A) Mexico 
B) the United Kingdom 
C) the United States 
D) Brazil 
E) Canada 
A) Mexico 
B) the United Kingdom 
C) the United States 
D) Brazil 
E) Canada

Question 10

Assuming the simple Taylor rule for dictating the federal funds rate,when the actual federal funds rate deviates from the suggested rate,it can be explained by:

Accepted Answer

A) bad monetary policy. 
B) discretionary fiscal policy. 
C) discretionary monetary policy. 
D) poorly informed monetary policy. 
E) poorly informed fiscal policy. 
A) bad monetary policy. 
B) discretionary fiscal policy. 
C) discretionary monetary policy. 
D) poorly informed monetary policy. 
E) poorly informed fiscal policy.

Question 11

A change in which of the following parameters shifts the AD curve  
?

Accepted Answer

A)    
B)    
C)    
D)    
E) a and b 
A)    
B)    
C)    
D)    
E) a and b

Question 12

In the short-run model,the steady state is characterized by:

Accepted Answer

A)    . 
B)    . 
C)    . 
D) all of the above 
E) none of the above 
A)    . 
B)    . 
C)    . 
D) all of the above 
E) none of the above

Question 13

In the presence of rational expectations,the central banks' willingness to battle inflation:

Accepted Answer

A) causes future inflation. 
B) becomes a determinant of past inflation. 
C) undermines the ability to fight inflation. 
D) becomes a determinant of expected inflation. 
E) weakens the central government. 
A) causes future inflation. 
B) becomes a determinant of past inflation. 
C) undermines the ability to fight inflation. 
D) becomes a determinant of expected inflation. 
E) weakens the central government.

Question 14

Which of the following equations,discussed in the text,can be used to predict the federal funds rate?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 15

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point __________ to point __________.

Accepted Answer

A) c;a 
B) c;b 
C) b;a 
D) a;b 
E) Not enough information is given. 
A) c;a 
B) c;b 
C) b;a 
D) a;b 
E) Not enough information is given.

Question 16

Which of the following best describes why the aggregate supply curve slopes upward?

Accepted Answer

A) When actual output exceeds potential,firms struggle to keep production in line with the high demand.Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. 
B) When actual output exceeds potential,firms have an easy time keeping production in line with the high demand.Firms therefore lower their prices by more than the usual amount in an attempt to cover increased production costs. 
C) When actual output exceeds potential,firms struggle to keep production in line with the high demand.Firms therefore lower their prices with decreased production costs. 
D) When actual output falls below potential,firms easily keep production in line with the high demand.Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. 
E) None of the above is correct. 
A) When actual output exceeds potential,firms struggle to keep production in line with the high demand.Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. 
B) When actual output exceeds potential,firms have an easy time keeping production in line with the high demand.Firms therefore lower their prices by more than the usual amount in an attempt to cover increased production costs. 
C) When actual output exceeds potential,firms struggle to keep production in line with the high demand.Firms therefore lower their prices with decreased production costs. 
D) When actual output falls below potential,firms easily keep production in line with the high demand.Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. 
E) None of the above is correct.

Question 17

On the aggregate supply curve,an increase in inflation causes __________,while a price shock causes __________.

Accepted Answer

A) an upward movement along the curve;the curve to shift 
B) downward movement along the curve;the curve to shift 
C) the curve to shift;movement along the curve 
D) downward movement along the curve;upward movement along the curve 
E) Not enough information is given. 
A) an upward movement along the curve;the curve to shift 
B) downward movement along the curve;the curve to shift 
C) the curve to shift;movement along the curve 
D) downward movement along the curve;upward movement along the curve 
E) Not enough information is given.

-Consider Figure 13.3.If there is a positive inflation shock,ceteris paribus,the economy would move from point to point .

Central banks always use monetary rules to dictate monetary policy.

In the short-run model,the steady state is characterized by:

A monetary policy rule may contain which of the following?

-Consider Figure 13.3.If rebels in Nigeria,a major oilproducing country,temporarily hijack privately owned and operated oil wells,this would be characterized in the aggregate supply curve as a movement from point to point .

The central bank often deviates from simple policy rules because:

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point to point ;eventually the economy returned to the steady state at point __.

During the __________,the actual federal funds rate was substantially lower than the rate suggested by the simple Taylor rule.

Which of the following countries does not adopt an explicit inflation target?

Assuming the simple Taylor rule for dictating the federal funds rate,when the actual federal funds rate deviates from the suggested rate,it can be explained by:

A change in which of the following parameters shifts the AD curve ?

In the short-run model,the steady state is characterized by:

In the presence of rational expectations,the central banks' willingness to battle inflation:

Which of the following equations,discussed in the text,can be used to predict the federal funds rate?

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point to point .

Which of the following best describes why the aggregate supply curve slopes upward?

On the aggregate supply curve,an increase in inflation causes ,while a price shock causes .

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 13: Stabilization Policy and the Asad Framework

-Consider Figure 13.3.If there is a positive inflation shock,ceteris paribus,the economy would move from point __________ to point __________.

Central banks always use monetary rules to dictate monetary policy.

In the short-run model,the steady state is characterized by:

A monetary policy rule may contain which of the following?

-Consider Figure 13.3.If rebels in Nigeria,a major oilproducing country,temporarily hijack privately owned and operated oil wells,this would be characterized in the aggregate supply curve as a movement from point __________ to point __________.

The central bank often deviates from simple policy rules because:

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point __________ to point __________;eventually the economy returned to the steady state at point __________.

During the __________,the actual federal funds rate was substantially lower than the rate suggested by the simple Taylor rule.

Which of the following countries does not adopt an explicit inflation target?

Assuming the simple Taylor rule for dictating the federal funds rate,when the actual federal funds rate deviates from the suggested rate,it can be explained by:

A change in which of the following parameters shifts the AD curve ?

In the short-run model,the steady state is characterized by:

In the presence of rational expectations,the central banks' willingness to battle inflation:

Which of the following equations,discussed in the text,can be used to predict the federal funds rate?

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point __________ to point __________.

Which of the following best describes why the aggregate supply curve slopes upward?

On the aggregate supply curve,an increase in inflation causes __________,while a price shock causes __________.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

-Consider Figure 13.3.If there is a positive inflation shock,ceteris paribus,the economy would move from point to point .

-Consider Figure 13.3.If rebels in Nigeria,a major oilproducing country,temporarily hijack privately owned and operated oil wells,this would be characterized in the aggregate supply curve as a movement from point to point .

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point to point ;eventually the economy returned to the steady state at point __.

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point to point .

On the aggregate supply curve,an increase in inflation causes ,while a price shock causes .