Question 1

A decline in the price of a bond causes the yield of the bond to

Accepted Answer

A) rise. 
B) fall. 
C) remain unchanged. 
D) rise if it's a short-term bond,fall if it's a long-term bond. 
A) rise. 
B) fall. 
C) remain unchanged. 
D) rise if it's a short-term bond,fall if it's a long-term bond.

Question 2

You have just read that the Federal Reserve has increased the money supply to avoid a recession.For a given price level,you would expect the LM curve to

Accepted Answer

A) shift up and to the left as the real money supply falls. 
B) shift up and to the left as the real money supply rises. 
C) shift down and to the right as the real money supply falls. 
D) shift down and to the right as the real money supply rises. 
A) shift up and to the left as the real money supply falls. 
B) shift up and to the left as the real money supply rises. 
C) shift down and to the right as the real money supply falls. 
D) shift down and to the right as the real money supply rises.

Question 3

Which of the following changes shifts the AD curve down and to the left?

Accepted Answer

A) A temporary increase in government purchases 
B) A rise in the nominal money supply 
C) A decrease in corporate taxes 
D) A decrease in consumer confidence 
A) A temporary increase in government purchases 
B) A rise in the nominal money supply 
C) A decrease in corporate taxes 
D) A decrease in consumer confidence

Question 4

An increase in the effective tax rate on capital would cause the IS curve to ________ and the LM curve to ________.

Accepted Answer

A) shift down and to the left; be unchanged 
B) shift down and to the left; shift up and to the left 
C) shift up and to the right; be unchanged 
D) shift up and to the right; shift up and to the left 
A) shift down and to the left; be unchanged 
B) shift down and to the left; shift up and to the left 
C) shift up and to the right; be unchanged 
D) shift up and to the right; shift up and to the left

Question 5

What adjusts to restore general equilibrium after a shock to the economy?

Accepted Answer

A) The LM curve 
B) The IS curve 
C) The FE line 
D) The labor supply curve 
A) The LM curve 
B) The IS curve 
C) The FE line 
D) The labor supply curve

Question 6

The probably effect of introducing an increased number of automatic teller machines is to

Accepted Answer

A) increase money demand,shifting the LM curve up and to the left. 
B) increase money demand,shifting the LM curve down and to the right. 
C) decrease money demand,shifting the LM curve up and to the left. 
D) decrease money demand,shifting the LM curve down and to the right. 
A) increase money demand,shifting the LM curve up and to the left. 
B) increase money demand,shifting the LM curve down and to the right. 
C) decrease money demand,shifting the LM curve up and to the left. 
D) decrease money demand,shifting the LM curve down and to the right.

Question 7

An adverse supply shock that is permanent shifts which curve in addition to the curves shifted by one that is temporary?

Accepted Answer

A) The LM curve 
B) The IS curve 
C) The FE line 
D) The labor demand curve 
A) The LM curve 
B) The IS curve 
C) The FE line 
D) The labor demand curve

Question 8

A decrease in money supply causes the real interest rate to ________ and output to ________ in the short run,before prices adjust to restore equilibrium.

Accepted Answer

A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall 
A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall

Question 9

Describe the effects,in both the short run and the long run,of an increase in the money supply.Explain what happens to real output and the price level.

Accepted Answer

In the short run,an increase in the mone

Question 10

Which of the following would shift the FE line to the right?

Accepted Answer

A) An adverse supply shock 
B) An increase in labor supply 
C) A decrease in the capital stock 
D) An increase in the future marginal productivity of capital 
A) An adverse supply shock 
B) An increase in labor supply 
C) A decrease in the capital stock 
D) An increase in the future marginal productivity of capital

Question 11

Which of the following changes shifts the SRAS curve up?

Accepted Answer

A) A decrease in the labor force 
B) A decrease in the money supply 
C) An increase in government purchases 
D) An increase in firms' costs 
A) A decrease in the labor force 
B) A decrease in the money supply 
C) An increase in government purchases 
D) An increase in firms' costs

Question 12

The aggregate demand curve

Accepted Answer

A) is vertical. 
B) slopes upward. 
C) is horizontal. 
D) slopes downward. 
A) is vertical. 
B) slopes upward. 
C) is horizontal. 
D) slopes downward.

Question 13

Which of the following changes shifts the SRAS curve up?

Accepted Answer

A) An increase in the labor force 
B) An increase in firms' costs 
C) A decrease in government purchases 
D) An increase in the money supply 
A) An increase in the labor force 
B) An increase in firms' costs 
C) A decrease in government purchases 
D) An increase in the money supply

Question 14

A change that increases real money demand relative to the real money supply causes

Accepted Answer

A) the LM curve to shift down and to the right. 
B) the LM curve to shift up and to the left. 
C) the IS curve to shift down and to the left. 
D) the IS curve to shift up and to the right. 
A) the LM curve to shift down and to the right. 
B) the LM curve to shift up and to the left. 
C) the IS curve to shift down and to the left. 
D) the IS curve to shift up and to the right.

Question 15

Classical economists believe that a market economy will normally

Accepted Answer

A) suffer from extended periods of sustained unemployment. 
B) achieve full-employment output. 
C) degenerate into pure monopolies in most industries. 
D) eliminate the problem of economic scarcity. 
A) suffer from extended periods of sustained unemployment. 
B) achieve full-employment output. 
C) degenerate into pure monopolies in most industries. 
D) eliminate the problem of economic scarcity.

Question 16

The IS-LM model predicts that a temporary beneficial supply shock

Accepted Answer

A) increases output,national saving,and investment,but not the real interest rate. 
B) increases output,national saving,and the real interest rate,but not investment. 
C) increases the real interest rate,investment,and output,but not national saving. 
D) increases output,national saving,investment,and the real interest rate. 
A) increases output,national saving,and investment,but not the real interest rate. 
B) increases output,national saving,and the real interest rate,but not investment. 
C) increases the real interest rate,investment,and output,but not national saving. 
D) increases output,national saving,investment,and the real interest rate.

Question 17

The IS curve would unambiguously shift up and to the right if there were

Accepted Answer

A) an increase in both government purchases and corporate taxes. 
B) an increase in both government purchases and the expected future marginal product of capital. 
C) an increase in the expected future marginal product of capital and a decrease in expected future output. 
D) a decrease in both corporate taxes and the expected future marginal product of capital. 
A) an increase in both government purchases and corporate taxes. 
B) an increase in both government purchases and the expected future marginal product of capital. 
C) an increase in the expected future marginal product of capital and a decrease in expected future output. 
D) a decrease in both corporate taxes and the expected future marginal product of capital.

Question 18

Under an assumption of monetary neutrality,a change in the nominal money supply has

Accepted Answer

A) no effect on the price level. 
B) a less than proportionate effect on the price level. 
C) a proportionate effect on the price level. 
D) a more than proportionate effect on the price level. 
A) no effect on the price level. 
B) a less than proportionate effect on the price level. 
C) a proportionate effect on the price level. 
D) a more than proportionate effect on the price level.

Question 19

An increase in the money supply would cause the FE line to

Accepted Answer

A) shift to the right. 
B) shift to the left. 
C) remain unchanged. 
D) remain unchanged if Ricardian equivalence holds; otherwise,shift to the right. 
A) shift to the right. 
B) shift to the left. 
C) remain unchanged. 
D) remain unchanged if Ricardian equivalence holds; otherwise,shift to the right.

A decline in the price of a bond causes the yield of the bond to

You have just read that the Federal Reserve has increased the money supply to avoid a recession.For a given price level,you would expect the LM curve to

Which of the following changes shifts the AD curve down and to the left?

An increase in the effective tax rate on capital would cause the IS curve to and the LM curve to .

What adjusts to restore general equilibrium after a shock to the economy?

The probably effect of introducing an increased number of automatic teller machines is to

An adverse supply shock that is permanent shifts which curve in addition to the curves shifted by one that is temporary?

A decrease in money supply causes the real interest rate to and output to in the short run,before prices adjust to restore equilibrium.

Describe the effects,in both the short run and the long run,of an increase in the money supply.Explain what happens to real output and the price level.

Which of the following would shift the FE line to the right?

Which of the following changes shifts the SRAS curve up?

The aggregate demand curve

Which of the following changes shifts the SRAS curve up?

A change that increases real money demand relative to the real money supply causes

Classical economists believe that a market economy will normally

The IS-LM model predicts that a temporary beneficial supply shock

The IS curve would unambiguously shift up and to the right if there were

Under an assumption of monetary neutrality,a change in the nominal money supply has

An increase in the money supply would cause the FE line to

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 9: The IS-LM/AD-AS Model

A decline in the price of a bond causes the yield of the bond to

You have just read that the Federal Reserve has increased the money supply to avoid a recession.For a given price level,you would expect the LM curve to

Which of the following changes shifts the AD curve down and to the left?

An increase in the effective tax rate on capital would cause the IS curve to ________ and the LM curve to ________.

What adjusts to restore general equilibrium after a shock to the economy?

The probably effect of introducing an increased number of automatic teller machines is to

An adverse supply shock that is permanent shifts which curve in addition to the curves shifted by one that is temporary?

A decrease in money supply causes the real interest rate to ________ and output to ________ in the short run,before prices adjust to restore equilibrium.

Describe the effects,in both the short run and the long run,of an increase in the money supply.Explain what happens to real output and the price level.

Which of the following would shift the FE line to the right?

Which of the following changes shifts the SRAS curve up?

The aggregate demand curve

Which of the following changes shifts the SRAS curve up?

A change that increases real money demand relative to the real money supply causes

Classical economists believe that a market economy will normally

The IS-LM model predicts that a temporary beneficial supply shock

The IS curve would unambiguously shift up and to the right if there were

Under an assumption of monetary neutrality,a change in the nominal money supply has

An increase in the money supply would cause the FE line to

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

An increase in the effective tax rate on capital would cause the IS curve to and the LM curve to .

A decrease in money supply causes the real interest rate to and output to in the short run,before prices adjust to restore equilibrium.