The Keynesian aggregate demand curve slopes downward because for any given money supply, an increase in the price level ______ real money holdings which _____ the interest rate and _____ income.
a. increases; lowers; increases
b. reduces; raises; reduces
c. reduces; lowers; increases
d. increases; raises; reduces
Question 2A social loss function is a way to
a. represent the objectives of policymakers.
b. balance the benefits lower inflation with the costs of higher unemployment and lower output.
c. calculate the costs of budget deficits.
d. a way to compensate the losers that result from changes in government policy.
e. both a and b.
Question 3Why is the Clayton Act of 1914 considered to have been favorable to the interests of organized labor?
(a) It restricted the application of the Sherman Antitrust Act and excluded labor unions from it.
(b) It legalized collective bargaining for the first time.
(c) It declared labor to be an article of commerce.
(d) It forbade the use of injunctions by the courts to stop strikes.
Question 4The classically-based models (classical, new classical, monetarist, real business cycle) all agree that
a. markets always clear.
b. monetary policy can affect output in the short-run but not the long-run.
c. changes in aggregate drive most changes in output.
d. stabilization policy is ineffective.
e. None of the above
Question 5Some economists argue that unemployment compensation increases the natural rate of unemployment because it increases the amount of time people spending finding new work while without work.
Additionally, it makes unemployment more visible with the steady growth in urbanization. Indicate whether the statement is true or false
Question 6The increased willingness of women to enter the workforce has most likely lead to
a. an increase in labor demand, higher real wages, and a lower price level.
b. an increase in labor supply, higher real wages, and a lower price level.
c. an increase in labor supply, higher real wages, and a higher price level.
d. a decrease in labor demand, lower real wages, and no effect on the price level.
e. none of the above.
Question 7The public-choice view states that
a. all governments are bad and should be abolished.
b. macroeconomic policymakers are only interested in the social good.
c. policymakers in the public sector work for the public, whereas policymakers in the private sector have private interests.
d. macroeconomic policymakers act to maximize their own welfare rather than acting for the social good.
e. both c and d.
Question 8According to the monetarists and new classical economists,
a. only anticipated monetary policy actions will affect output and employment in the short run.
b. only unforeseen monetary policy actions will affect output and employment in the short run.
c. both anticipated and unanticipated monetary policy actions will affect output and employment in the short run.
d. both anticipated and unanticipated monetary policy actions will affect output but not employment in the short run.
e. none of the above.
Question 9Printing money was the main method the Union government used to finance the Civil War (18611865), and as a result the money supply in the North rose by a factor of 4.
Indicate whether the statement is true or false
Question 10Animal skins, livestock, tobacco, teeth and rocks have historically served as a medium of exchange, unit of account, store of value and method of deferred payment.
Indicate whether the statement is true or false
Question 11By fixing the mint price of gold among commercial nations under the Gold Standard, the exchange rate risk falls significantly, thus encouraging trade.
Indicate whether the statement is true or false
Question 12Hyperinflations are caused by
a. persistant falls in aggregate supply.
b. increases in poverty levels.
c. high levels of money growth over sustained periods of time.
d. falls in the velocity of money.
Quick Reply
