Raising the federal funds ratethe aggregate demand curve so that equilibrium real GDPand the price leveldecreases; increases; risesO b. increases; increases; fallsdecreases; decreases; risesO d. increases; increases; risesO e decreases; decreases; falls

In an economy, federal funds rate is the interest rate that is charged by one financial authority to…

Raising the federal funds rate the aggregate demand curve so that equilibrium real GDP and the price level O a. decreases; increases; rises O b. increases; increases; falls decreases; decreases; rises O d. increases; increases; rises O e decreases; decreases; falls

Raising the federal funds rate the aggregate demand curve so that equilibrium real GDP and the price level O a. decreases; increases; rises O b. increases; increases; falls decreases; decreases; rises O d. increases; increases; rises O e decreases; decreases; falls

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If wages adjust fully to price increases in the long run, fiscal policy will Select one: Oa have no affect on either output or the price level. O b. have no affect on output. Oc have no affect on the price level. O d. affect both output and the price level.
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Suppose the economy is operating at potential GDP. Then the federal government decides to implement a large tax cut. Which curve shifts and in which direction? O aggregate demand shifts left aggregate supply shifts right. aggregate supply shifts left. aggregate demand shifts right
b.makes prices "sticky." O c. maximizes its volatility. O d. automatically reduces recessionary trends. QUESTION 5 An increase in taxes shifts the O a. aggregate supply curve outward. O b. consumption schedule downward. O c. aggregate demand curve outward. O d. consumption schedule upward.
An increase in taxes when the economy is above full employment OA. increases; falls B. increases; rises O C. does not change; does not change O D. decreases; falls aggregate demand and real GDP, and the price level
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In a binding situation,an increase in net taxes Select one: O a. causes the ADcurve to become horizontal. O b. does not shift the ADcurve. O c shifts the AD curve to the left. O d. shifts the ADcurve to the right.
Aggregate demand is defined as O the relationship between the total quantity of goods and services demanded and the income level, all other determinants of spending unchanged. the relationship between the total quantity of goods and services demanded and the price level, all other determinants of spending unchanged. the demand for goods and services generated by all sectors in the economy, holding price level constant. O the relationship between the total quantity of goods and services demanded and the supply of factors of production, all other determinants of production unchanged.
What would happen to output, employment, and the price level if the government increased spending on infrastructure, ceteris paribus? O Output would decrease, employment would decrease, and the price level would decrease O Output would decrease, employment would decrease, and the price level would increase O Output would decrease, employment would increase, and the price level would increase Output would increase, employment would increase, and the price level would decrease. O Output would increase, employment would increase, and the price level would increase Question 2(Multiple Choice Worth 5 points) (03.06 MC) Assume the price level is increasing, real GDP is decreasing, and the unemployment rate is increasing. Which event would explain this macroeconomic situation? OA positive supply shock OA negative supply shock A positive demand shock OA negative demand shock O insufficient data
How do fluctuations in aggregate demand and short-run aggregate supply bring fluctuations in real GDP around potential GDP? Starting from a full-employment equilibrium, a decrease in aggregate demand and creates gap. O A. increases real GDP above potential GDP; an inflationary OB. decreases real GDP below potential GDP; an inflationary OC. increases real GDP above potential; a recessionary O D. decreases real GDP below potential GDP; a recessionary _, short-run aggregate , and the economy returns to a full-employment In the long run, the money wage rate supply equilibrium. O A. rises; increases B. falls; decreases C. rises; decreases D. falls; increases