Question

Question 50 (1 point) A(n) _____ in oil prices and a(n) _____ in taxes will shift short-run aggregate supply to the left. Question 50 options: a) decrease; increase b) decrease; decrease c) increase; decrease d) increase; increase Question 51 (1 point) Which of the following events will shift the aggregate demand curve to the right? Question 51 options: a) an increase in household debt b) a catastrophic hurricane hitting the northeastern United States c) a decrease in taxes d) a decrease in military spending Question 52 (1 point) According to Keynes, what determines the level of employment and income? Question 52 options: a) aggregate savings b) aggregate supply c) aggregate expenditures d) government spending Question 53 (1 point) If firms believe that the business climate is improving, then the short-run aggregate supply will shift to the right. Question 53 options: a) False b) True Question 54 (1 point) Which of the following statements regarding the short-run aggregate supply curve is true? Question 54 options: a) The short-run aggregate supply curve shifts to the left when business expectations become more positive. b) The short-run aggregate supply curve shifts to the right when the costs of capital rise. c) The short-run aggregate supply curve shifts to the right with a reduction in burdensome regulations. d) The short-run aggregate supply curve shifts to the left when tax rates on businesses are lowered. Question 55 (1 point) If an economy is in long-run equilibrium, it is also in short-run equilibrium. Question 55 options: a) True b) False Question 56 (1 point) An increase in interest rates will lead to an increase in aggregate demand. Question 56 options: a) False b) True Question 57 (1 point) Which of the following events will NOT cause a rightward shift of the aggregate demand curve? Question 57 options: a) A decrease in interest rates leads to an increase in investment. b) The dollar depreciates. c) Consumers expect an economic contraction will soon occur. d) The government decides to spend more money on goods. Question 58 (1 point) Discretionary fiscal policy does not require action from Congress. Question 58 options: a) False b) True Question 59 (1 point) _____ will automatically expand or contract in ways that help counter movements of the business cycle. Question 59 options: a) Business investment b) Autonomous spending c) Discretionary spending d) Automatic stabilizers Question 60 (1 point) Transfer payments are: Question 60 options: a) a vital part of discretionary fiscal policy. b) not part of the government budget. c) payments made to government officials who transfer them back to private companies. d) monies paid directly to individuals by the government. Question 61 (1 point) If the federal deficit was $3 trillion, economic growth was 2%, and the unemployment rate was 10%, a functional finance economist would suggest increasing taxes in order to balance the budget. Question 61 options: a) False b) True Question 62 (1 point) Public choice economists think deficit spending reduces the perceived cost of current government operations and then shifts additional costs to the next generation. Question 62 options: a) False b) True Question 63 (1 point) _____ marginal tax rates and _____ are commonly used to increase aggregate supply. Question 63 options: a) Raising; reducing government spending b) Lowering; increasing government transfer payments c) Raising; increasing government transfer payments d) Lowering; offering investment tax credits Question 64 (1 point) All of these illustrate roles of financial intermediaries, which create incentives for individuals to use financial intermediaries, EXCEPT: Question 64 options: a) when savers can compare the terms of savings accounts across financial institutions, they are able to get lower interest rates than would be possible otherwise. b) a bank makes so many loans it becomes skilled at predicting which loan applicants are trustworthy. c) a saver is able to get a return from his savings being loaned to others, yet is also able to withdraw funds when desired. d) by offering standardized savings and loan products, a financial institution has fewer costs than negotiating each saving and loan agreements individually. Question 65 (1 point) (Figure: Market for Loanable Funds 2) Based on the graph, if business taxes increase, the demand for loanable funds curve will shift from _____ to _____ and the new equilibrium will be at point _____, holding supply constant at S0. Question 65 options: a) D1; D0; a b) D0; D1; b c) D1; D0; d d) D0; D1; c Question 66 (1 point) The U.S. General Accounting Office (GAO) has concluded that _____ would help the introduction of a dollar coin be successful. Question 66 options: a) removing the dollar bill from circulation b) choosing to place a well-known public figure on the coin c) rounding prices to the nearest dollar d) subsidizing businesses that accept bills to help them transfer over to coins Question 67 (1 point) The supply curve for loanable funds represents _____ and is _____. Question 67 options: a) savers; vertical b) investors; upward sloping c) investors; vertical d) savers; upward sloping Question 68 (1 point) The double coincidence of wants problem is made worse by the introduction of money. Question 68 options: a) True b) False Question 69 (1 point) The demand curve for loanable funds represents _____ and is _____. Question 69 options: a) investors; downward sloping b) savers; downward sloping c) savers; horizontal d) investors; horizontal Question 70 (1 point) If the federal funds rate falls to zero, the Federal Reserve loses its ability to stimulate the economy. Question 70 options: a) False b) True Question 71 (1 point) Tighter lending standards tend to _____ the money multiplier, making it _____ for the Fed to use its tools effectively. Question 71 options: a) increase; harder b) decrease; harder c) increase; easier d) decrease; easier Question 72 (1 point) (Table) SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. This bank's reserve ratio is: Question 72 options: a) 0.25. b) 0.10. c) 0.025. d) 0.075. Question 73 (1 point) The most important tool of monetary policy is the discount rate. Question 73 options: a) False b) True Question 74 (1 point) The membership of the Board of Governors of the Federal Reserve System consists of: Question 74 options: a) the presidents of seven of the Federal Reserve district banks. b) four government-appointed persons and three commercial bank presidents. c) seven persons appointed by the President of the United States. d) the President of the United States, three members of the Senate, and three members of the House of Representatives. Question 75 (1 point) A bank has $50,000 in checking account deposits and loans of $49,000. Of the $49,000 loaned out, $43,000 remains in the checking accounts of the loan recipients. The bank has $50,000 cash on hand, and the reserve requirement is 25%. The amount of its required reserves equals: Question 75 options: a) $23,250. b) $27,000. c) $50,000. d) $26,750. Question 76 (1 point) The equation of exchange applies only in the short run. Question 76 options: a) True b) False Question 77 (1 point) In the long run, when the economy is at full employment, any change in money supply: Question 77 options: a) is brought about by a change in tax policy. b) leads to a change in prices. c) leads to a change in velocity only. d) leads to a change in aggregate output only. Question 78 (1 point) Which statement is NOT a criticism of the Federal Reserve's handling of the 2007–2009 financial crisis? Question 78 options: a) The Fed should have recognized that there was a problem sooner. b) The Fed encouraged a housing bubble by keeping interest rates too low for too long. c) The Fed overstepped its authority by exercising powers it did not legally have. d) The Fed should have strengthened the dollar to shore up exports. Question 79 (1 point) If the unemployment rate is 4.5% and the inflation rate is 6%, the Federal Reserve will most likely: Question 79 options: a) buy bonds. b) sell bonds. c) lower the reserve requirement. d) lower the discount rate. Question 80 (1 point) If the economy is facing inflationary pressures, the Federal Reserve will: Question 80 options: a) raise interest rates. b) lower interest rates. c) raise taxes. d) decrease government spending. Question 81 (1 point) (Figure: Shifts in SRAS and AD) Starting at equilibrium point d, if the cost of inputs rises, the short-run equilibrium will move to point _____, and thus real output will _____ and the price level will _____. Question 81 options: a) a; decrease; stay the same b) b; decrease; increase c) c; stay the same; increase d) There is not enough information to answer this question. Question 82 (1 point) If wages are sticky, then monetary policy actions: Question 82 options: a) have to be coordinated with union labor contract negotiations. b) have to be announced ahead of implementation to be effective. c) have no impact on either prices or GDP. d) are more effective than if wages were not sticky. Question 83 (1 point) In a global economy, a problem with using fiscal and monetary policies to fix the problems in our country is that those policies: Question 83 options: a) are more likely to help other countries than to help us. b) make our trade balance deteriorate. c) become completely ineffective. d) can lead to retaliatory actions by other nations. Question 84 (1 point) Predictions based on rational expectations are always correct. Question 84 options: a) False b) True Question 85 (1 point) Trade between two countries: Question 85 options: a) results in more choices and better prices for consumers. b) may cause job loss and firm closings in the country without the comparative advantage. c) is always positive for both consumers and producers. d) results in more choices and better prices for consumers but may cause job loss and firm closings in the country without the comparative advantage. Question 86 (1 point) The difference between a tariff and a quota is that: Question 86 options: a) they both collect tax money, but quotas are more equitable. b) quotas collect tax money, but tariffs do not. c) they both collect tax money, but tariffs are more equitable. d) tariffs collect tax money, but quotas do not. Question 87 (1 point) Tariffs can depress world economies. Question 87 options: a) False b) True Question 88 (1 point) Appreciation of the U.S. dollar versus the British pound may occur when: Question 88 options: a) interest rates in the United States decrease and interest rates in the United Kingdom stay the same. b) inflation occurs in the United States but not in the United Kingdom. c) interest rates in both the United States and the United Kingdom increase. d) disposable income in the United States falls and income in the United Kingdom stays the same. Question 89 (1 point) Other things equal, if U.S. disposable income falls, imports will _____ and the current account deficit will _____. Question 89 options: a) fall; decrease b) rise; increase c) fall; increase d) rise; decrease Question 90 (1 point) If the yen is appreciating relative to the British pound, then the: Question 90 options: a) pound is depreciating relative to the yen. b) pound can be either appreciating or depreciating relative to the yen. c) yen is worth less relative to the pound. d) pound is appreciating relative to the yen.

Answer 1

As per the Chegg guidelines, we are required to do only first 4 questions and rest is left to discretion.

Question 50 :

Answer : An increase in oil prices and an increase in taxes will shift the aggregate supply curve to left, because both of them increases the cost of production.

Question 51 :

Answer : A decrease in taxes will shift the aggregate demand curve to the right because taxes have a inverse relation with aggregate demand.

Question 52 :

Answer : According to Keynes, aggregate supply or aggregate demand determines the level of employment and income. If there is an increase in AS and AD there is an increase in employment and income and vice-versa.

Question 53 :

Answer : In short run, labor only can be increased in the production process. So, aggregate supply will only to right by the increase in production due to increase in labor input. so, true.

Question 54 :

Answer : The short run aggregate supply curve shift to the right when there is reduction in burdensome regulation.Option A & D will shift it to right not left and Option B will shift it to left.

Question 55 :

Answer : The statement is false, as when an economy is in long run equilibrium, inflationary and deflationary gaps can occur.

Question 56 :

Answer : An increase in interest rates will reduce investments, which will reduce employment leading to a fall income leading to a fall in consumption and then fall in Aggregate demand. So, false.

Question 57 :

Answer : When consumer expects that an economic contraction or recession will occur and they will reduce their consumption, due to rational expectations.

Question 63 :

Answer : Lowering marginal ta rates and offering investment tax credits are commonly used to increase aggregate supply, as it will reduce the cost of production leading to a rightward shift in aggregate supply curve.

Question 67 :

Answer : The supply curve for loanable curve represents savers and is upward sloping. Consumer save more when interest rate is more.