Quantitative easing involved Fed purchases of long term securities rather than short term securities.
a. True
b. False
Indicate whether the statement is true or false
Question 2If real GDP for Mexico was 19.8 trillion pesos at the end of 1999 and 21.3 trillion pesos at the end of 2000 . then Mexico's economy grew at an annual rate of _____.
a. -0.015
b. 4.4
c. 4.2
d. 7.57
e. 3.8
Question 3Good A has an income elasticity equal to 1.0 and a cross price elasticity with respect to Good B of -0.6 . Then:
a. Good A is an inferior good and Goods A and B are substitutes.
b. Good A is an inferior good and Goods A and B are complements.
c. Good A is a normal good and Goods A and B are substitutes.
d. Good A is a normal good and Goods A and B are complements.
Question 4When there is a liquidity trap, when the Fed adds bank reserves, there is a large effect on borrowing, investment and aggregate demand.
a. True
b. False
Indicate whether the statement is true or false
Question 5Economic growth is measured as:
a. the quarterly percentage change in nominal GDP.
b. total output per year divided by the inflation rate.
c. total nominal GDP at the end of each year.
d. the percentage change in population growth per year.
e. the annual percentage change in real GDP.
Question 6The measure of the relationship between a change in income and the consequent relative change in quantity demanded at a given price is the:
a. cross elasticity of supply.
b. elasticity of supply.
c. cross elasticity of demand.
d. income elasticity of demand.
Question 7The lag before the full effects of monetary policy on inflation are felt is longer than the lag before its effects on real output and unemployment are felt.
a. True
b. False
Indicate whether the statement is true or false
Question 8Both new classical economists and monetarists disagree with Keynesians about the optimal degree of involvement of the government in determining the equilibrium level of real GDP.
a. True
b. False
Indicate whether the statement is true or false
Question 9If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then:
a. a 1 increase in the quantity of hamburgers purchased will lead to a 1.2 increase in the price of fries.
b. a 10 increase in the price of a hamburger will lead to a 12 increase in the quantity of fries demanded at a given price.
c. a 1 decrease in the price of a hamburger will lead to a 1.2 increase in the quantity of fries demanded at a given price.
d. a 10 increase in the quantity of hamburgers purchased will lead to a 12 increase in the price of fries.
Question 10The problem of time lags in making policy changes is less acute for monetary policy than it is for fiscal policy.
a. True
b. False
Indicate whether the statement is true or false
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