20) Refer to the graph shown. An increase in U.S. Income would shift: Price of euros (in dollars) Price level Quantity of euros A) S1 right and cause the euro to lose value. C) Sy left and cause the euro to gain value. 21) Refer to the graph shown. Expansionary fiscal policy shifts the aggregate demand curve from: AD₁ ADD S1 D1 SAS -AD₂ AD₂ A) expansionary monetary policy. C) contractionary fiscal policy. B) D₁ right and cause the euro to gain value. D) D₁ left and cause the euro to lose value. Real output A) ADO to AD2 but then out to AD3 if crowding out occurs. B) AD2 to AD1 and then from AD1 to ADo if crowding out occurs, C) ADO to AD2 whether or not crowding out occurs. D) ADO to AD2 but then back to AD1 if crowding out occurs. 22) Which of the following gives the correct relationship between nominal and real interest rates? A) Nominal interest rate + real interest rate - expected inflation rate B) Nominal interest rate-real interest rate + expected inflation rate C) Real interest rate nominal interest rate + expected inflation rate D) Nominal interest rate= real interest rate - expected inflation 23) A country that wants to increase its exchange rate to a higher level than the market exchange rate dictates would most likely adopt: B) contractionary monetary policy. D) expansionary fiscal policy.
20) Refer to the graph shown. An increase in U.S. Income would shift: Price of euros (in dollars) Price level Quantity of euros A) S1 right and cause the euro to lose value. C) Sy left and cause the euro to gain value. 21) Refer to the graph shown. Expansionary fiscal policy shifts the aggregate demand curve from: AD₁ ADD S1 D1 SAS -AD₂ AD₂ A) expansionary monetary policy. C) contractionary fiscal policy. B) D₁ right and cause the euro to gain value. D) D₁ left and cause the euro to lose value. Real output A) ADO to AD2 but then out to AD3 if crowding out occurs. B) AD2 to AD1 and then from AD1 to ADo if crowding out occurs, C) ADO to AD2 whether or not crowding out occurs. D) ADO to AD2 but then back to AD1 if crowding out occurs. 22) Which of the following gives the correct relationship between nominal and real interest rates? A) Nominal interest rate + real interest rate - expected inflation rate B) Nominal interest rate-real interest rate + expected inflation rate C) Real interest rate nominal interest rate + expected inflation rate D) Nominal interest rate= real interest rate - expected inflation 23) A country that wants to increase its exchange rate to a higher level than the market exchange rate dictates would most likely adopt: B) contractionary monetary policy. D) expansionary fiscal policy.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Need all four questions. ....don't attempt if you will not solve all four questions. ..
Transcribed Image Text:I
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WVE A-S
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CASIO
20) Refer to the graph shown. An increase in U.S. income would shift:
S1
IX
Price level
Price of euros
(in dollars)
0
Quantity of euros
A) S1 right and cause the euro to lose value.
C) Sy left and cause the euro to gain value.
21) Refer to the graph shown. Expansionary fiscal policy shifts the aggregate demand curve from:
D1
AD₁
ADO
-AD₂
SAS
AD₂
B) Dj right and cause the euro to gain value.
D) D₁ left and cause the euro to lose value.
Real output
A) ADO to AD2 but then out to AD3 if crowding out occurs.
B) AD2 to AD1 and then from AD1 to ADo if crowding out occurs,
C) ADO to AD2 whether or not crowding out occurs.
D) ADO to AD2 but then back to AD1 if crowding out occurs.
A) expansionary monetary policy.
C) contractionary fiscal policy.
22) Which of the following gives the correct relationship between nominal and real interest rates?
A) Nominal interest rate + real interest rate-expected inflation rate
B) Nominal interest rate= real interest rate + expected inflation rate
C) Real interest rate nominal interest rate + expected inflation rate
D) Nominal interest rate= real interest rate - expected inflation.
23) A country that wants to increase its exchange rate to a higher level than the market exchange rate dictates
would most likely adopt:
B) contractionary monetary policy.
D) expansionary fiscal policy.
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