Megan Clermont
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1000 Intro to Economics (Monetary and Fiscal Policy) Quiz sobre Monetary and Fiscal Policy, criado por Megan Clermont em 14-04-2016.

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Megan Clermont
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Monetary and Fiscal Policy

Monetary and Fiscal Policy

Questão 1 de 20

1

According to the theory of liquidity preference, how is the money supply affected by the interest rate?

Selecione uma das seguintes:

  • directly

  • negatively

  • not affected

  • positively

Explicação

Questão 2 de 20

1

When the interest rate increases, how do the opportunity cost of holding money and the quantity of money demanded change?

Selecione uma das seguintes:

  • The opportunity cost of holding money increases, so the quantity of money demanded increases.

  • The opportunity cost of holding money increases, so the quantity of money demanded decreases.

  • The opportunity cost of holding money decreases, so the quantity of money demanded decreases.

  • The opportunity cost of holding money decreases, so the quantity of money demanded increases.

Explicação

Questão 3 de 20

1

According to liquidity-preference theory, if the quantity of money demanded is greater than the quantity supplied, what will happen to the interest rate and the quantity of money demanded?

Selecione uma das seguintes:

  • The interest rate will increase, and the quantity of money demanded will increase.

  • The interest rate will increase, and the quantity of money demanded will decrease.

  • The interest rate will decrease, and the quantity of money demanded will decrease.

  • The interest rate will decrease, and the quantity of money demanded will increase.

Explicação

Questão 4 de 20

1

Which of the following shifts money demand to the right?

Selecione uma das seguintes:

  • an increase in the interest rate

  • a decrease in the price level

  • an increase in the price level

  • a decrease in the interest rate

Explicação

Questão 5 de 20

1

Which of the following is an effect of an increase in the interest rate?

Selecione uma das seguintes:

  • It induces firms to invest more.

  • It shifts money demand to the right.

  • It leads to the appreciation of the exchange rate.

  • It induces households to increase consumption.

Explicação

Questão 6 de 20

1

How does an increase in the price level affect the interest rate?

Selecione uma das seguintes:

  • It increases the money demand and lowers the interest rate.

  • It lowers the money demand and increases the interest rate.

  • It increases the money demand and the interest rate.

  • It lowers the money demand and the interest rate.

Explicação

Questão 7 de 20

1

In the short run, what effect does an increase in the money supply have on interest rates and aggregate demand?

Selecione uma das seguintes:

  • It causes interest rates to decrease and aggregate demand to shift left

  • It causes interest rates to increase and aggregate demand to shift right.

  • It causes interest rates to decrease and aggregate demand to shift right.

  • It causes interest rates to increase and aggregate demand to shift left.

Explicação

Questão 8 de 20

1

If the Bank of Canada conducts open-market sales, how do the money supply and the aggregate demand change?

Selecione uma das seguintes:

  • The money supply increases, and aggregate demand shifts left.

  • The money supply increases, and aggregate demand shifts right.

  • The money supply decreases, and aggregate demand shifts left.

  • The money supply decreases, and aggregate demand shifts right.

Explicação

Questão 9 de 20

1

The economy is in long-run equilibrium. Suppose that automatic teller machines become cheaper and more convenient to use, and as a result the demand for money falls. Other things being equal, what would we expect will happen to the price level and real GDP in the short and long run?

Selecione uma das seguintes:

  • In the short run, the price level and real GDP would rise, but in the long run the price level would rise and real GDP would be unaffected.

  • In the short run, the price level and real GDP would fall, but in the long run the price level would fall and real GDP would be unaffected.

  • In the short run, the price level and real GDP would rise, but in the long run they would both be unaffected.

  • In the short run, the price level and real GDP would fall, but in the long run they would both be unaffected.

Explicação

Questão 10 de 20

1

How does the interest rate change when the price level falls and when the money supply falls?

Selecione uma das seguintes:

  • The interest rate rises when the price level falls and falls when the money supply falls.

  • The interest rate falls when the price level falls and rises when the money supply falls.

  • The interest rate rises both when the price level falls and when the money supply falls.

  • The interest rate falls both when the price level falls and when the money supply falls.

Explicação

Questão 11 de 20

1

In a small open economy with a flexible exchange rate, a monetary injection by the Bank of Canada causes which of the following?

Selecione uma das seguintes:

  • It causes a shift of the aggregate-demand curve farther to the right than it would in a closed economy.

  • It causes an additional decrease in demand for Canadian-produced goods and services that is not realized in a closed economy.

  • It causes net exports to fall.

  • It causes the dollar to appreciate.

Explicação

Questão 12 de 20

1

Fiscal policy refers to the idea that aggregate demand is changed by changes in what?

Selecione uma das seguintes:

  • trade policy

  • government spending and taxes

  • the money supply

  • exchange rates

Explicação

Questão 13 de 20

1

If the multiplier is 5, what is the MPC?

Selecione uma das seguintes:

  • 0.75

  • 0.80

  • 1.00

  • 0.50

Explicação

Questão 14 de 20

1

If the MPC is 0.75 and there are no crowding-out effects, an initial increase in AD of $150 billion will eventually shift the AD curve to the right by how much?

Selecione uma das seguintes:

  • $133.33 billion

  • $80 billion

  • $600 billion

  • $800 billion

Explicação

Questão 15 de 20

1

Assume that the MPC is 0.8. Assume that the total crowding-out effect is $25 billion. How will an increase in government purchases of $9 billion shift the AD curve?

Selecione uma das seguintes:

  • It will shift the AD curve left by $25 billion.

  • It will shift the AD curve right by $45 billion.

  • It will shift the AD curve left by $20 billion.

  • It will shift the AD curve right by $20 billion.

  • It will shift the AD curve left by $45 billion.

Explicação

Questão 16 de 20

1

In a small open economy with a flexible exchange rate, an expansionary fiscal policy will cause which of the following to happen?

Selecione uma das seguintes:

  • It will cause an increase in the money supply

  • It will cause net exports to rise.

  • It will cause the dollar to depreciate.

  • It will cause a reduction in the demand for Canadian-produced goods.

Explicação

Questão 17 de 20

1

Canada is a small open economy with a flexible exchange rate. Which of the following effects will a contractionary fiscal policy have?

Selecione uma das seguintes:

  • It will cause the Canadian interest rate to fall below the world interest rate for a short period of time, which in turn will cause the dollar to depreciate and net exports to increase.

  • It will cause the Canadian interest rate to rise above the world interest rate for a short period of time, which in turn will cause the dollar to depreciate and net exports to increase.

  • It will cause the Canadian interest rate to fall below the world interest rate for a short period of time, which in turn will cause the dollar to appreciate and net exports to decrease.

  • It will cause the Canadian interest rate to rise above the world interest rate for a short period of time, which in turn will cause the dollar to appreciate and net exports to decrease.

Explicação

Questão 18 de 20

1

Suppose the closed economy is in long-run equilibrium. Technological change shifts the long-run aggregate-supply curve $80 billion to the right. At the same time, government purchases increase by $40 billion. If the MPC equals 0.8 and the crowding-out effect is $70 billion, what would we expect to happen in the long-run to real GDP and the price level?

Selecione uma das seguintes:

  • Real GDP would be higher but the price level would be the same.

  • Both real GDP and the price level would be lower.

  • Real GDP would be higher but the price level would be lower.

  • Both real GDP and the price level would be higher.

Explicação

Questão 19 de 20

1

Suppose the closed economy is in long-run equilibrium. Immigration of skilled workers shifts the long-run aggregate supply curve $60 billion to the right. At the same time, government purchases increase by $40 billion. If the MPC equals 0.75 and the crowding-out effect is $160 billion, what would we expect to happen in the long-run to real GDP and the price level?

Selecione uma das seguintes:

  • Real GDP would be higher, but the price level would be lower.

  • Both real GDP and the price level would be lower.

  • Both real GDP and the price level would be higher.

  • Real GDP would be higher, but the price level would be the same.

Explicação

Questão 20 de 20

1

If the federal government cuts spending to balance the federal budget, how can the Bank of Canada act to prevent unemployment and recession while maintaining the balanced budget?

Selecione uma das seguintes:

  • by increasing the money supply

  • by raising taxes

  • by decreasing the money supply

  • by cutting expenditures

Explicação

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