EC 302 Final Exam Questions with Correct Answers 100% PASS

EC 302 Final Exam Questions with
Correct Answers 100% PASS

When is monetary policy in the IS-LM model more effective?




a) When the LM is flat.

b) When the IS is steep

c) When the LM is steep

d) Both b and c - CORRECT ANSWER-When LM (Liquidity/Money Supply) is

steep

When is Fiscal policy in the IS-LM model more effective?

a) When the LM is flat.

b) When the IS is steep

c) When the LM is steep

d) Both a and b - CORRECT ANSWER-When LM (Liquidity/Money Supply) is

flat and IS ( Investment/Savings) is steep

, When is monetary policy more effective in the AD-AS model?

a) When the AS is flat

b) When the AS is steep

c) I don't know - CORRECT ANSWER-When the AS (Aggregate Supply) is flat

All else equal a reduction in wages in the AD-AS model

a) increase production

b) reduces production

c) increases prices - CORRECT ANSWER-Increase production

For a given G the fiscal multiplier is....

a) Bigger in the IS-LM model than the AD-AS model

b) Smaller

c) The same - CORRECT ANSWER-Bigger in the IS-LM model than the AD-AS

model

Which country allegedly suffered from a liquidity trap problem in the 1990s?

a) U.S

b) U.K.

c) Japan




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