Changes in all of the following shift the IS curve except
a. the MPC.
b. income.
c. taxes.
d. consumer confidence.
e. all of the above shift IS curve.
Question 2Eisenhower's conservative policies were characterized by budget surpluses that produced further declines in price levels.
Indicate whether the statement is true or false
Question 3Suppose that most government spending was on capital goods that contribute to economic growth. How would that affect the Ricardian equivalence debate?
What will be an ideal response?
Question 4Intermediation entities include which of the following?
(a) Life and fire insurance companies
(b) Stock exchanges
(c) Mutual saving banks
(d) All of the above
Question 5New Keynesian explanations for sticky prices and wages include
a. menu costs.
b. efficiency wages.
c. insider-outsider distinctions.
d. productivity shocks.
e. all but d.
Question 6The largest percent of colonial trade (both exports and imports) was with
(a) the United Kingdom.
(b) Southern Europe.
(c) Africa.
(d) the West Indies.
Question 7In the IS-LM model, if interest rates fall while output falls the
a. money supply must have fallen.
b. price level must have fallen.
c. money supply must have risen.
d. level of government spending must have risen.
e. none of the above.
Question 8The structural deficit is the deficit that
a. is composed by of nondiscretionary spending by the federal government.
b. results from the economy being below its natural rate of output.
c. exists when output is at its natural rate of output.
d. results from temporary tax cuts.
e. all of the above
Question 9The Cambridge and Fischer versions of the quantity theory are identical if
a. V = k..
b. V=k2.
c. V= 1/k.
d. none of the above.
Question 10Fractional reserve banking
(a) destroys money.
(b) requires banks to engage in 100 percent of total banking activities.
(c) allows banks to create money while requiring them only to hold a fraction of money.
(d) all of the above.
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