oop Flashcards
Expansionary fiscal policy will be most effective in increasing real gross domestic product when
the aggregate supply curve is horizontal
A decrease in which of the following will most likely increase the government’s budget deficit
income taxes
Which of the following policies would most likely be recommended in an economy with a low inflation rate and a significantly high unemployment rate?
A decrease in the tax rate on corporate profits and a decrease in the discount rate
An expansionary fiscal policy would most likely cause which of the following changes in output and interest rates?
Output Increase
Interest rate increase
Which of the following would result in the largest increase in aggregate demand?
A $30 billion increase in military expenditure and a $30 billion open market purchase of government securiti
Which of the following will result in an increase in the supply of computers?
An increase in the number of computer manufacturers
f exchange rates are allowed to fluctuate freely and the United States demand for Indian rupees increases, which of the following will most likely occur?
The dollar price of Indian goods will increase.
An automatic stabilizer is best exemplified by which of the following?
Transfer payments
If the exchange rate changes from 1 United States dollar = 100 yen to 1 United States dollar = 80 yen, which of the following will happen
United States exports to Japan will increase.
The natural rate of unemployment can be defined as the unemployment rate that exists when the economy
produces at the full-employment output level
A fully anticipated expansionary fiscal policy will cause the price level and real output to change in which of the following ways in the long run?
Price level increase
Real output does not change
Suppose that the economy is operating at full employment. If the government wants to discourage consumption spending, stimulate investment spending, and maintain full- employment output, which of the following combinations of monetary and fiscal policies would most likely achieve these goals?
Monetary Policy = Increase money supply
Fiscal Policy = Increase personal income taxes
Using the same amount of resources, Betaland can produce 80 tons of corn or 80 tons of wheat and Alphaland can produce 40 tons of corn or 20 tons of wheat. Which of the following statements is true?
he opportunity cost of producing a ton of corn in Betaland is a ton of wheat.
According to the short-run Phillips curve, which of the following will occur when the Federal Reserve increases the money supply?
The unemployment rate will decrease, and the inflation rate will increase.
With a constant money supply, an increase in the demand for money will affect interest rates and bond prices in which of the following ways?
Interest Rate INcrease
Bond Price decrease
Which of the following policies will most likely lead to a reduction in the natural rate of unemployment?
Increasing government purchases of goods and services
Assume that the market basket is composed of the quantities in year 2010. What is the consumer price index (CPI) in 2018 ?
150
An increase in income tax rates with no change in government spending will result in which of the following?
A decrease in private savings
Which of the following is true of the long-run Phillips curve?
It is vertical at the natural rate of unemployment.
Which of the following will result in an increase in real gross domestic product (GDP) in the short run with no change in the government budget?
An equal increase in both taxes and government spending
Human capital refers to which of the following?
The technology available to individual workers
Which of the following will lower inflationary expectations
The Federal Reserve’s announcement that it will steadily raise the federal funds rate
An increase in national saving will affect the supply of loanable funds and the real interest rate in which of the following ways?
Supply of loanable funds = Increase
Real interest rate= Decrease
The real interest rate for a consumer loan is 5 percent, and the expected inflation rate is 2 percent. What is the nominal interest rate on the consumer loan?
7
If both the demand for and the supply of coffee increase, what will happen to the equilibrium price and quantity in the coffee market?
Price = indeterminate Quantity = Increase
Which of the following is true about economic growth?
It is positively related to a country’s investment in human capital.
f a country’s consumer price index was 200 last year and is 190 this year, which of the following must be true for the country from last year to this year?
The unemployment rate has decreased by 5 percent
If central banks in Asia reduce the supply of their own currencies on the foreign-exchange market relative to the United States dollar, which of the following will occur?
Asian goods will be more expensive for United States consumers.
Jamal lost his computer programming job when it was outsourced to a company abroad. After looking unsuccessfully for several months
for another job, he gave up and is currently attending school. Currently Jamal is classified as
not in the labor force
Which of the following will decrease gross domestic product by the greatest amount?
A $20 billion decrease in government spending
