The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure in the economy.
Indicate whether the statement is true or false
Ques. 2An expansionary monetary policy in the United States should
A) cause the dollar to appreciate.
B) decrease the foreign currency price of U.S. exports.
C) decrease net exports.
D) decrease the dollar price of imports.
Ques. 3Which policy tool allows the Federal Reserve the greatest control over monetary policy?
A) the reserve requirement B) open market operations
C) lender of last resort D) the discount rate
Ques. 4The Federal Reserve's performance in the mid-to-late 1980s, 1990s, and early 2000s has received high marks from economists, even without inflation targeting.
Indicate whether the statement is true or false
Ques. 5If firms and workers have adaptive expectations, what impact will contractionary monetary policy have on inflation, unemployment, and the Phillips curve?
What will be an ideal response?
Ques. 6An increase in the price level in the United States will shift the aggregate expenditure line upward.
Indicate whether the statement is true or false
Ques. 7The Fed has adopted an interest rate target for most of the time since World War II.
Indicate whether the statement is true or false
Ques. 8A decrease in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls.
B) Equilibrium GDP rises.
C) Equilibrium GDP is not affected by a decrease in aggregate expenditure.
D) Equilibrium GDP may rise or fall depending on the size of the decrease in aggregate expenditure relative to the initial level of GDP.