Question Chapter 13 Random

05 Jun Question Chapter 13 Random

Question
Chapter 13 Random

Question 1 1 / 1 point

Which of the following is a building block of neoclassical economics?

Question options:

a)

wages and prices will adjust in a flexible manner

b)

aggregate demand model

c)

sticky wages and prices

d)

the size of the economy is determined by real GDP

Question 2 1 / 1 point

Using a neoclassical model, what will the level of cyclical unemployment be when an economy is producing at potential GDP?

Question options:

a)

3% – 5%

b)

zero

c)

never 0%

d)

1% – 3%

Question 3 1 / 1 point

From a neoclassical view, which of the following is a true statement?

Question options:

a)

Because wages are flexible, they are unaffected by high rates of unemployment.

b)

Lower wages will cause an economy-wide increase in the price of a key input.

c)

The economy cannot sustain production above its potential GDP in the long run.

d)

A surge in aggregate demand ends up as a rise in output, but does not increase price levels.

Question 4 1 / 1 point

In the neoclassical version of the AD/AS model, which of the following should you use to represent the AS curve?

Question options:

a)

the AS curve shifting as potential GDP expands

b)

a vertical line drawn at the level of potential GDP

c)

the AS curve shifting as productivity increases

d)

an upward sloping curve with a vertical top

Question 5 1 / 1 point

A typical Keynesian aggregate supply (AS) curve _______________ and a typical Keynesian Phillips curve _____________.

Question options:

a)

is vertical; is vertical

b)

slopes upward; slopes upward

c)

slopes upward; slopes downward

d)

slopes downward; slopes downward

Question 6 1 / 1 point

The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to rebound back to its _____________ and its ____________________.

Question options:

a)

natural level of output; cyclical unemployment rate

b)

real GDP; natural rate of unemployment

c)

long term growth; cyclical unemployment

d)

potential GDP; natural rate of unemployment

Question 7 1 / 1 point

The Keynesian view of economics assumes that:

Question options:

a)

economic output is primarily determined by aggregate supply.

b)

the Keynesian Phillips curve is vertical.

c)

the economy must focus is on long-term growth.

d)

wages are sticky.

Question 8 1 / 1 point

At a macroeconomic level, the theory of rational expectations points out that if the ______________________ is vertical over time, then people should rationally expect this pattern.

Question options:

a)

Phillips curve

b)

aggregate demand curve

c)

GDP

d)

aggregate supply curve

Question 9 1 / 1 point

From a neoclassical viewpoint, government should focus less on:

Question options:

a)

aggregate supply.

b)

controlling inflation.

c)

long-term growth.

d)

cyclical unemployment.

Question 10 1 / 1 point

If aggregate supply is vertical, then which of the following statements must be true?

Question options:

a)

Inflation creates greater social benefits.

b)

Inflation will accompany any rise in output.

c)

Aggregate demand does not cause inflationary changes in price level.

d)

Aggregate demand does not affect the quantity of output.

Question 11 1 / 1 point

A typical neoclassical aggregate supply (AS) curve ______________ and a typical neoclassical Phillips curve __________________.

Question options:

a)

slopes upward; slopes downward

b)

is vertical; is vertical

c)

is vertical; slopes downward

d)

slopes upward; is vertical

Question 12 1 / 1 point

Suppose that a rise in business confidence has led to more investment in the economy and higher levels of output. In the short-run Keynesian analysis, the rise in aggregate demand will:

Question options:

a)

lower unemployment.

b)

cause government to increase spending.

c)

cause government to lower taxes.

d)

exports will drop.

Question 13 1 / 1 point

Which of the following represents a Keynesian point of view of macroeconomics?

Question options:

a)

vertical aggregate supply

b)

focus on long-term growth in the economy

c)

creating increases in aggregate demand to reduce unemployment

d)

aggregate supply is the primary determinate of economic output

Question 14 1 / 1 point

Which of the following is most strongly supported by the Keynesian perspective of macroeconomics?

Question options:

a)

inflation offers no offsetting gains in terms of higher unemployment

b)

shifts in unemployment primary determine changes in the price level

c)

inflation is a price that might have to be paid to achieve lower unemployment

d)

more emphasis on economic growth and how labor markets work

Question 15 1 / 1 point

A vertical AS curve means that the level of aggregate supply (or potential GDP) will determine the real GDP of the economy, regardless of the level of:

Question options:

a)

inflationary pressures.

b)

real unemployment.

c)

cyclical unemployment.

d)

aggregate demand.

Chapter 13 mandatory

Question 16 1 / 1 point

Referring to the diagram, complete the following sentence: Any increase in aggregate demand in the short-run will lead to:

Question options:

a)

a 45 degree supply curve, which will lead to recession.

b)

a 45 degree supply curve, which will lead to increasing unemployment.

c)

an increase in output (Q1 to Q2), but it will also lead to prices increasing.

d)

an increase in output (Q1 to Q2), but it will also lead to a recession.

Chapter 15 Random

Question 17 1 / 1 point

If the original level of aggregate demand is AD0, then an expansionary monetary policy that shifts aggregate demand to AD1 will only:

Question options:

a)

create a deflationary loss in price level.

b)

create an inflationary increase in price level.

c)

create an increase in unemployment.

d)

create an increase in GDP.

Question 18 1 / 1 point

If you were to survey central bankers from around the world and ask them what they believe the primary task of monetary policy should be, what would the most popular answer likely be?

Question options:

a)

bank runs

b)

leverage cycle

c)

bank supervision

d)

fighting inflation

Question 19 1 / 1 point

When the central bank decides it will sell bonds using open market operations:

Question options:

a)

the money supply decreases.

b)

interest rates decrease.

c)

the money supply increases.

d)

the money supply is unaffected.

Question 20 0 / 1 point

When the central bank decides to increase the discount rate, the:

Question options:

a)

money supply increases.

b)

interest rates are unaffected.

c)

interest rates increase.

d)

interest rates decrease.

Question 21 1 / 1 point

Which of the following terms is used to describe the proportion of deposits that banks are legally required to deposit with the central bank?

Question options:

a)

reserve requirements

b)

deposit requirements

c)

monetary requirements

d)

discount requirements

Question 22 1 / 1 point

Which of the following is described as an innovative and nontraditional method used by the Federal Reserve to expand the quantity of money and credit during the recent U.S. recession?

Question options:

a)

increased reserves requirements

b)

increased discount rate

c)

open market operations

d)

quantitative easing

Question 23 1 / 1 point

What is the name given to the macroeconomic equation MV = PQ?

Question options:

a)

basic velocity of money equation

b)

basic velocity of price equation

c)

basic quantity equation of money

d)

basic quantity equation of output

Question 24 1 / 1 point

Which of the following institutions oversees the safety and stability of the U.S. banking system?

Question options:

a)

Federal Open Market Committee

b)

Federal Financial Institutions Examination Council

c)

Office of the Comptroller of the Currency

d)

The Federal Reserve

Question 25 1 / 1 point

Regardless of the outcome in the long run, ______________________ always has the effect of stimulating the economy in the short run.

Question options:

a)

expansionary monetary policy

b)

contractionary monetary policy

c)

reverse quantitative easing policy

d)

tight monetary policy

Question 26 0 / 1 point

If the economy is in recession with high unemployment and output below potential GDP, then __________________ would cause the economy to return to its potential GDP?

Question options:

a)

higher interest rates

b)

fewer loanable funds

c)

a loose monetary policy

d)

a tight monetary policy

Chapter 15 important

Question 27 1 / 1 point

A central bank that wants to increase the quantity of money in the economy will:

Question options:

a)

raise the discount rate.

b)

sell bonds in open market operations.

c)

buy bonds in open market operations.

d)

reverse quantitative easing.

Question 28 1 / 1 point

A central bank that desires to reduce the quantity of money in the economy can:

Question options:

a)

raise the reserve requirement.

b)

lower the discount rate.

c)

buy bonds in open market operations.

d)

engage in quantitative easing.

Question 29 1 / 1 point

The Central Bank has raised its reserve requirements from 10% to 12%. If Southern Bank finds that it is not holding enough in reserves to meet the higher requirements, then it will likely:

Question options:

a)

keep track of whether money is flowing in or out of the bank.

b)

borrow for the short term from the central bank.

c)

buy bonds to increase the size of its reserve assets.

d)

reduce the quantity of money and loans on the balance sheet.

Chapter 15 problems

Question 30 1 / 1 point

Central Bank policy requires Northern Bank to hold 10% of its deposits as reserves. Northern Bank policy prevents it from holding excess reserves. If the central bank purchases $30 million in bonds from Northern Bank what will be the result?

Question options:

a)

Northern’s bond assets increase by $30 million

b)

the money supply in the economy decreases

c)

Northern’s loan assets increase by $30 million

d)

Northern’s net worth changes by $30 million

Question 31 1 / 1 point

If nominal GDP is 1800 and the money supply is 450, then what is velocity?

Question options:

a)

22

b)

4.5

c)

4

d)

25

Question 32 1 / 1 point

If GDP is 1800 and the money supply is 300, then what is the velocity?

Question options:

a)

18.3

b)

8

c)

4.57

d)

6

Question 33 1 / 1 point

If the economy is at equilibrium as shown in the diagram above, then a contractionary monetary policy will

Question options:

a)

increase unemployment and decrease inflation.

b)

increase output and increase inflation.

c)

have no effect on output, but increase inflation.

d)

increase unemployment, but have little effect on inflation.