1. The definition of GDP deflator is It implies that real GDP A. GDP deflator it implies that the rate of inflation is equal to the no min al GDP growth rate of real GDP plus the growth rate of nominal GDP. B. GDP deflator =- real GDP ;; it implies that the rate of inflation is equal to the no min al GDP growth rate of real GDP minus the growth rate of nominal GDP. C. GDPdeflator = no min al GDP real GDP -; it implies that the rate of inflation is equal to the growth rate of nominal GDP plus the growth rate of real GDP. no min al GDP ; it implies that the rate of inflation is equal to the D. GDP deflator real GDP growth rate of nominal GDP minus the growth rate of real GDP.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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answers for this multiple questions.( without question 3)

5. If nominal money demand doubles and the real money supply also doubles, what
happens to the price level?
A). The price level increases by a factor of four.
B). The price level doubles,
C). The price level is unchanged.
D). The price level falls by one-half.
6. Suppose a one-year discount bond offers to pay $1000 in one year and currently has
a 15% interest rate. Given this information, we know that the bond's price must be
A) $869.56.
B) $1150.
C) $850.
D) S950.
E) none of the above
2
7. The money supply will tend to fall when which of the following occurs?
A) a central bank sale of bonds
B) a decrease in the ratio of reserves to deposits
C) a shift in public preferences away from currency to checkable deposits
D) all of the above
E) none of the above
8. An increase in the reserve ratio, 0, will cause
A) an increase in the monetary base (H).
B) a reduction in H.
C) an increase in the money multiplier.
D) a reduction in the money multiplier.
E) none of the above
9. An increase in the parameter c, the proportion of money individuals wish to hold
as currency, will tend to cause which of the following?
A) an increase in the monetary base (H)
B) a reduction in H
C) an increase in the money multiplier
D) a reduction in the money multiplier
10. If individuals do not hold checkable deposits, we know that
A) money supply (M) = the amount of currency (CU ).
B) the monetary base (H) = the amount of currency (CU ).
C) the money multiplier is 1.
D) all of the above
11. Which of the following will shift the LM curve down?
A). Real income increases.
B). Real income decreases.
C). Wealth increases
D). money supply increases.
Transcribed Image Text:5. If nominal money demand doubles and the real money supply also doubles, what happens to the price level? A). The price level increases by a factor of four. B). The price level doubles, C). The price level is unchanged. D). The price level falls by one-half. 6. Suppose a one-year discount bond offers to pay $1000 in one year and currently has a 15% interest rate. Given this information, we know that the bond's price must be A) $869.56. B) $1150. C) $850. D) S950. E) none of the above 2 7. The money supply will tend to fall when which of the following occurs? A) a central bank sale of bonds B) a decrease in the ratio of reserves to deposits C) a shift in public preferences away from currency to checkable deposits D) all of the above E) none of the above 8. An increase in the reserve ratio, 0, will cause A) an increase in the monetary base (H). B) a reduction in H. C) an increase in the money multiplier. D) a reduction in the money multiplier. E) none of the above 9. An increase in the parameter c, the proportion of money individuals wish to hold as currency, will tend to cause which of the following? A) an increase in the monetary base (H) B) a reduction in H C) an increase in the money multiplier D) a reduction in the money multiplier 10. If individuals do not hold checkable deposits, we know that A) money supply (M) = the amount of currency (CU ). B) the monetary base (H) = the amount of currency (CU ). C) the money multiplier is 1. D) all of the above 11. Which of the following will shift the LM curve down? A). Real income increases. B). Real income decreases. C). Wealth increases D). money supply increases.
1. The definition of GDP deflator is
It implies that
real GDP
A. GDP deflator =
it implies that the rate of inflation is equal to the
no min al GDP
growth rate of real GDP plus the growth rate of nominal GDP.
real GDP
B. GDP deflator =
it implies that the rate of inflation is equal to the
no min al GDP'
growth rate of real GDP minus the growth rate of nominal GDP.
no min al GDP
C. GDP deflator =
it implies that the rate of inflation is equal to the
real GDP
growth rate of nominal GDP plus the growth rate of real GDP.
no min al GDP
D. GDP deflator =
it implies that the rate of inflation is equal to the
real GDP
growth rate of nominal GDP minus the growth rate of real GDP.
2. If C=2000+0.9x(Y –T), what decrease in taxes must occur for equilibrium
output to increase by 1000?
A) 111
B) 100
C) 1000
D) 500
3. Based on our understanding of the paradox of saving in Chapter 3, we know that a
reduction in the desire to save will cause
A) an increase in equilibrium GDP.
B) a reduction in GDP.
C) an increase in the desire to invest.
D) no change in equilibrium GDP.
E) a permanent reduction in the level of saving.
4. Which of the following will cause the money multiplier to become larger?
A). an increase in high powered money.
B). an increase in the public's preferences for checking deposits as opposed to
holding currency.
C). a decrease in the discount rate
D). a decrease in the interest rate paid on reserves
Transcribed Image Text:1. The definition of GDP deflator is It implies that real GDP A. GDP deflator = it implies that the rate of inflation is equal to the no min al GDP growth rate of real GDP plus the growth rate of nominal GDP. real GDP B. GDP deflator = it implies that the rate of inflation is equal to the no min al GDP' growth rate of real GDP minus the growth rate of nominal GDP. no min al GDP C. GDP deflator = it implies that the rate of inflation is equal to the real GDP growth rate of nominal GDP plus the growth rate of real GDP. no min al GDP D. GDP deflator = it implies that the rate of inflation is equal to the real GDP growth rate of nominal GDP minus the growth rate of real GDP. 2. If C=2000+0.9x(Y –T), what decrease in taxes must occur for equilibrium output to increase by 1000? A) 111 B) 100 C) 1000 D) 500 3. Based on our understanding of the paradox of saving in Chapter 3, we know that a reduction in the desire to save will cause A) an increase in equilibrium GDP. B) a reduction in GDP. C) an increase in the desire to invest. D) no change in equilibrium GDP. E) a permanent reduction in the level of saving. 4. Which of the following will cause the money multiplier to become larger? A). an increase in high powered money. B). an increase in the public's preferences for checking deposits as opposed to holding currency. C). a decrease in the discount rate D). a decrease in the interest rate paid on reserves
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