Suppose that the Fed makes a 100 billion open-market sale of Treasury bonds, and the money ...

Suppose that the Fed makes a 100 billion open-market sale of Treasury bonds, and the money multiplier is 6 . Which of the following impacts aremostlikely to result?
 a. The money supply shifts inward, and the equilibrium interest rate rises in the money market.
  b. The money supply shifts outward, and the equilibrium interest rate falls in the money market.
  c. Investment declines, causing the aggregate demand curve to shift leftward, reducing equilibrium real GDP and thus slowing the economy.
  d. Both a. and c. are correct.
  e. Both b. and c. above are correct.

QUESTION 2

One problem with the unemployment rate is that:
 a. discouraged workers are included in the calculation.
  b. the data includes part-time workers as fully employed.
  c. underemployment is measured in the calculation.
  d. all of these are problems.

QUESTION 3

Which of the following is true about the demand curve for a monopolistically competitive firm?
 a. It is less elastic (steeper) than for monopoly, but more elastic (flatter) than for a perfectly competitive firm.
  b. It is less elastic (steeper) than the demand curve for either a monopoly firm or a perfectly competitive firm.
  c. It is more elastic (flatter) than the demand curves for either a monopoly firm or a perfectly competitive firm.
  d. It is less elastic (steeper) than for a perfectly competitive firm, but more elastic (flatter) than for a monopoly firm.

QUESTION 4

Assume the demand for money curve is stationary and the Fed increases the money supply. The result is that people:
 a. increase the supply of bonds, thus driving up the interest rate.
  b. increase the supply of bonds, thus driving down the interest rate.
  c. increase the demand for bonds, thus driving up the interest rate.
  d. increase the demand for bonds, thus driving down the interest rate.

QUESTION 5

The unemployment rate measures the percentage of:
 a. people in the civilian labor force who are without jobs and actively seeking jobs.
  b. the U.S. population that is out of work and actively seeking a job.
  c. the civilian noninstitutionalized population that is out of work and actively seeking a job.
  d. people over age 21 who are without jobs and actively seeking jobs.

QUESTION 6

How are demand-pull and cost-push inflation reflected in terms of the AD-AS model?

QUESTION 7

When the Fed decreases the money supply, interest rates:
 a. rise.
  b. fall.
  c. are unaffected.
  d. rise and then fall.
  e. fall and then rise.

QUESTION 8

Which of the following groups of people are counted as employed?
 a. People who work at least one hour a week.
  b. People who work at least 15 hours a week as unpaid employees of a family business.
  c. People who are out of work due to bad weather.
  d. All of these are counted as employed.