Exam 24: The Influence of Monetary and Fiscal Policy on Aggregate Demand

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Figure 34-4. On the figure, MS represents money supply and MD represents money demand. -Refer to Figure 34-4. Suppose the money-demand curve is currently MD1. If the current interest rate is r2, then

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Question 101

Which of the following shifts aggregate demand to the left?

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Question 102

Most recessions and depressions

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Question 103

Which of the following properly describes the interest-rate effect that helps explain the slope of the aggregate- demand curve?

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Question 104

Which of the following correctly explains the crowding-out effect?

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Question 105

Sometimes, changes in monetary policy and/or fiscal policy are intended to offset changes to aggregate demand over which policymakers have little or no control.

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Question 106

Which of the following sequences best explains the negative slope of the aggregate-demand curve?

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Question 107

When the money supply increases, there is an excess ___ of money. As a result, interest rates _ and aggregate demand ___.

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Question 108

In which of the following cases does the aggregate-demand curve shift to the right?

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Question 109

Suppose households attempt to increase money holdings. To stabilize output and employment, the Federal Reserve will .

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Question 110

When the Fed sells government bonds, the reserves of the banking system

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Question 111

A decrease in the domestic ___ causes domestic goods to become less expensive relative to foreign goods and increases net exports. The increase in net exports causes an) _ in the quantity of domestic aggregate goods and services demanded and is known as the ___ effect.

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Question 112

If the MPC is 0.8 and there are no crowding-out or accelerator effects, then an initial increase in aggregate demand of $120 billion will eventually shift the aggregate demand curve to the right by

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Question 113

If the interest rate is below the Fed's target, the Fed would

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Question 114

According to the theory of liquidity preference, if output decreases

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Question 115

Assuming a multiplier effect, but no crowding-out or investment-accelerator effects, a $100 billion increase in government expenditures shifts aggregate

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Question 116

If the Fed conducts open-market sales, which of the following quantities increases)?

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Question 117

The exchange-rate effect is based, in part, on the idea that

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Question 118

Which of the following is not a reason the aggregate-demand curve slopes downward? As the price level increases,

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Question 119

During the economic downturn of 2008-2009, the Federal Reserve

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Question 120

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Exam 24: The Influence of Monetary and Fiscal Policy on Aggregate Demand

Figure 34-4. On the figure, MS represents money supply and MD represents money demand. -Refer to Figure 34-4. Suppose the money-demand curve is currently MD1. If the current interest rate is r2, then

Which of the following shifts aggregate demand to the left?

Most recessions and depressions

Which of the following properly describes the interest-rate effect that helps explain the slope of the aggregate- demand curve?

Which of the following correctly explains the crowding-out effect?

Sometimes, changes in monetary policy and/or fiscal policy are intended to offset changes to aggregate demand over which policymakers have little or no control.

Which of the following sequences best explains the negative slope of the aggregate-demand curve?

When the money supply increases, there is an excess _____ of money. As a result, interest rates _____ and aggregate demand _____.

In which of the following cases does the aggregate-demand curve shift to the right?

Suppose households attempt to increase money holdings. To stabilize output and employment, the Federal Reserve will .

When the Fed sells government bonds, the reserves of the banking system

A decrease in the domestic _____ causes domestic goods to become less expensive relative to foreign goods and increases net exports. The increase in net exports causes an) _____ in the quantity of domestic aggregate goods and services demanded and is known as the _____ effect.

If the MPC is 0.8 and there are no crowding-out or accelerator effects, then an initial increase in aggregate demand of $120 billion will eventually shift the aggregate demand curve to the right by

If the interest rate is below the Fed's target, the Fed would

According to the theory of liquidity preference, if output decreases

Assuming a multiplier effect, but no crowding-out or investment-accelerator effects, a $100 billion increase in government expenditures shifts aggregate

If the Fed conducts open-market sales, which of the following quantities increases)?

The exchange-rate effect is based, in part, on the idea that

Which of the following is not a reason the aggregate-demand curve slopes downward? As the price level increases,

During the economic downturn of 2008-2009, the Federal Reserve

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

Filters

When the money supply increases, there is an excess ___ of money. As a result, interest rates _ and aggregate demand ___.

A decrease in the domestic ___ causes domestic goods to become less expensive relative to foreign goods and increases net exports. The increase in net exports causes an) _ in the quantity of domestic aggregate goods and services demanded and is known as the ___ effect.