Module 4:
Question 1
400 parmaownnof 400 Flag ouestion
If the short-run aggregate supply curve is horizontal and the long-run aggregate supply curve is
vertical, then a change in the money supply will change in the short run and change
the long run.
Selectone
A. onlyoutput; only prices v
B. both prices and output; both prices and output
C. only prices; only output
D. both prices and output; only prices
I'he correct answer is: only output; only prices
Question 2
If a short-run equilibrium occurs at a level of output above the natural rate, then in the transition to
the long run prices will , and output will
Selectone
A increase; decrease v
B. decrease; increase
C. decrease; decrease
D increase; increase
I'he correct answer is: increase; decrease
,Question 3
Stabilization policy refers to policy actions aimed at:
Selctane
A maintiningconstant shares ofcutput ging 0 sbor nd captaL
8. reducingthe severityof shotruneconomic uctatons. v
€. preventing increases nthe poverty rate.
equalsng incomesof householdsinthe economy.
Question 4
Ifthe short-run aggregate supply curve s horizontal, and each member of the general public chooses
tohold a larger fraction of his or her income as cash balances, then:
Selctone:
A priceswillincrese in the hort
outputand employment il increaseinthe short run.
c prices will ecrease i theshort run
outputand employment will decrease i theshort un. v
, In the Keynesian-cross model, i the MPC equals 075, then a $3 billion decrease in taxes increases.
planned expenditures by and increases the equilibrium level of income by
Selctane
A $3bion; 3 biion
B 5225 bilion; 225 bilon
€. $3biion; 9 biion
0. 225 bilon; $9biion
Question 6
Anincrease in income raises money and___the equilibrium interest rate.
seectone
A suppiycaises
8. suppiylowers
€. demanc; owers
0. demanciaises v
Question 1
400 parmaownnof 400 Flag ouestion
If the short-run aggregate supply curve is horizontal and the long-run aggregate supply curve is
vertical, then a change in the money supply will change in the short run and change
the long run.
Selectone
A. onlyoutput; only prices v
B. both prices and output; both prices and output
C. only prices; only output
D. both prices and output; only prices
I'he correct answer is: only output; only prices
Question 2
If a short-run equilibrium occurs at a level of output above the natural rate, then in the transition to
the long run prices will , and output will
Selectone
A increase; decrease v
B. decrease; increase
C. decrease; decrease
D increase; increase
I'he correct answer is: increase; decrease
,Question 3
Stabilization policy refers to policy actions aimed at:
Selctane
A maintiningconstant shares ofcutput ging 0 sbor nd captaL
8. reducingthe severityof shotruneconomic uctatons. v
€. preventing increases nthe poverty rate.
equalsng incomesof householdsinthe economy.
Question 4
Ifthe short-run aggregate supply curve s horizontal, and each member of the general public chooses
tohold a larger fraction of his or her income as cash balances, then:
Selctone:
A priceswillincrese in the hort
outputand employment il increaseinthe short run.
c prices will ecrease i theshort run
outputand employment will decrease i theshort un. v
, In the Keynesian-cross model, i the MPC equals 075, then a $3 billion decrease in taxes increases.
planned expenditures by and increases the equilibrium level of income by
Selctane
A $3bion; 3 biion
B 5225 bilion; 225 bilon
€. $3biion; 9 biion
0. 225 bilon; $9biion
Question 6
Anincrease in income raises money and___the equilibrium interest rate.
seectone
A suppiycaises
8. suppiylowers
€. demanc; owers
0. demanciaises v
