If the central bank responds to a single negative supply shock with monetary validation, we can expect an increase in... O a. The money supply but a decrease in costs and prices. O b. Costs, the price level and the money supply. O C. The size of the output gap. O d. The price level and unemployment. e. Costs but a decrease in real national income.

If the central bank responds to a single negative supply shock with monetary validation, we can expect an increase in... O a. The money supply but a decrease in costs and prices. O b. Costs, the price level and the money supply. O C. The size of the output gap. O d. The price level and unemployment. e. Costs but a decrease in real national income.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which point/s represent an equilibrium in the goods market? a. A only O b. A and D O c. A and C O d. All of the above Which point/s represent an equilibrium in the money market? O a. A and D O b. All of the above O c. A only O d. A and C A decrease in autonomous spending will decrease the equilibrium interest rate. O a. False; keep O b. False; increase O c. False; not affect because autonomous spending is not related to interest rate O d. True
Question 3 When placed in the AD/AS framework, the simple quantity theory of money requires O A horizontal AD curve. O A vertical AS curve. O A horizontal AS curve. O A vertical AD curve. Question 4 If decline in interest rates doesn't lead to increased investment then, O Unemployment will be the same. Real GDP will be the same as before. O Allof the above O AD curve will remain unchanged.
4. Suppose that people expect inflation to equal 3 percent, but in fact prices rise by 5 percent. Indicate whether this unexpected higher rate of inflation would help or hurt each of the following groups. a homeowner with a fixed-rate mortgage. a union worker with a fixed labor contract a company that has invested some of its endowment in a government bonds which pay a fixed rate of return. 5. Indicate how each of the following events would affect the aggregate demand AD curve: a short-run decrease in the price level an increase in consumer confidence on the price level and real GDP an increase in government purchases
In the AS/AD Model, a decrease in the financial friction will Select one: O a. Shift the aggregate demand curve to the right. Ob. O b. Shift the aggregate supply curve to the left. Shift the aggregate supply curve to the right. O c. O d. Shift the aggregate demand curve to the left.
What type of macroeconomics presents the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy? macroeconomics is the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy. O A. Monetarist B. Classical OC. Keynesian O D. Long-run Classical macroeconomics A. is currently championed by Paul Krugman in his weekly column in the New York Times B. had its beginnings with the 1936 publication The General Theory of Employment, Interest, and Money C. explains how the economy performs in the face of a major slump in spending D. fell into disrepute during the Great Depression Click to select your answer. MacBook Air DII DD 000 F11 F12 F7 F8 F9 F10 esc F4 F5 F6 F1 F2 F3 & ! @ # $ 5 7 8 delete 1 2 3 {…
Price Level Long-run AS Y, Y₁ Short-run AS Quantity of Real Output Suppose the economy is operating in a recession such as point B in the graph. If policymakers allow the economy to adjust to the long-run natural level on its own O a people will reduce their price expectations and aggregate demand will shift right O b. people will reduce their price expectations and the short-run aggregate supply will shift right Opeople will raise their price expectations and the short-run aggregate supply will shift left O d. people will raise their price expectations and aggregate demand will shift left
According to the basic AS-AD model with a horizontal AS curve, high inflation and recession can occur in the short-run at the same time when there is: O b. an adverse supply shock with a decrease in aggregate demand. O C. a favorable supply shock with a decrease in aggregate demand. O d. a favorable supply shock without a change in aggregate demand. an adverse supply shock without a change in aggregate demand.
A constant inflation rate is shown with aggregate demand shifting rightward O A. faster than the aggregate supply shifts leftward. B. at the same rate as the aggregate supply shifts rightward. C. faster than the aggregate supply shifts rightward. D. with no shifts in aggregate supply. O E. at the same rate as the aggregate supply shifts leftward.
Consider the basic AD/AS macro model in long-run equilibrium that experiences a positive AD shock. In the short run, the price level and output In the long run, the price level and output O a. Decreases; decreases; decreases further; decreases further. O b. Decreases; decreases; decreases further; returns to potential output. O c. Increases; increases; increases further; increases further. O d. Increases; decreases; increases further; returns to potential output. O e. Increases; increases; increases further; returns to potential output.
The misperceptions theory concludes that: O A. in the short run, unanticipated monetary changes are neutral but anticipated monetary changes are not neutral, B. in the short run, both anticipated and unanticipated monetary changes are not neutral. Oc. unanticipated monetary changes are not neutral in either the short run or the long run. O D. in the short run, anticipated monetary changes are neutral but unanticipated monetary changes are not neutral.
Inflation-rate targeting by an independent central bank O A. feeds inflation expectations. O B. helps price signals work. O C. results in confusing price signals. O D. favours a hands - on emphasis on government discretion.
Actual inflation is the sum of three separate components: .. O a. Accelerated, expected and output gap inflation. O b. Validated, expected and output gap inflation. O c. Output gap, expected and supply-shock inflation. O d. Accelerated, demand and supply inflation. O e. Output gap, wage-push and demand inflation.