6 The upward sloping LM function has shifted inward to the left and which ofthe following is likely to be the main cause:O a.All of the answers.O b. Central bank has conducted OMO to sell bonds.The central has stopped the QE practice.O d. The required reserve ratio has increased.An increase in the tax rate will cause the simple upward sloping demandfunction in the simple goods market:O a.To become steeper to have a smaller output.O b. To become flatter to have a smaller output.To become steeper to have a larger outputO d. To become flatter to have a larger output.Which of the following will shift the IS function to the right to the largestextent (the largest shift)?O a.Cannot tell for sure.O b. An increase in government expenditure G.An increase in marginal propensity to consume c1.O d. A decrease in the taxes T.Which of the following statement is wrong for the LM?O a.An increase in the government spending (G) will shift the LM.O b. An increase in investment (I) will shift the LM.All of the answersO d. A change in the tax rate (t) is going to shift the LM.

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Chapter33: Aggregate Demand And Aggregate Supply

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Suppose the Bank of Canada lowers its target for the overnight interest rate and longer-term interest rates in the market fall as a result. When this occurs, the commercial banks respond to in the demand for loans by.. O a An increase; selling government securities to the Bank of Canada in exchange for cash, with which they can extend new loans. An increase; borrowing cash from the Bank of Canada with which they can extend new loans. O c. An increase; buying government securities from the Bank of Canada, against which they can extend new loans. O d. A decrease; buying government securities from the Bank of Canada in exchange for cash, and calling in existing loans. O e. A decrease; selling government securities to the Bank of Canada and calling in existing loans.
1. 2. 3. Which of the following statements is true? O a. The goods and money markets can never be in equilibrium. O b. The goods and money markets are in equilibrium at the points where the money market is in equilibrium. O c. The goods and money markets are in equilibrium at their point of intersection only. O d. The goods and money markets are in equilibrium at the points where the goods market is in equilibrium. Which of the following describes the steepest investment schedule? O a. I=450-8(3) b. 1-450-2(3) O c. 1=450-9(3) O d. 1=450-5(3) Which of the following will shift the investment schedule to the left? O a. Decrease in autonomous investment spending O b. Decrease in autonomous spending O c. Increase in coefficient b d. Decrease in coefficient k
Recent news reports in the United States suggest a downward swing in the stock market. The result will be Choose one: O A. a leftward shift of the aggregate demand curve. O B. a downward movement along the aggregate demand curve. O an upward movement along the aggregate demand curve. OD. a rightward shift of the aggregate demand curve. See Hint
If real interest rates increase, the expenditure line Select one: O a. does not change. O b. becomes steeper. O c. becomes flatter. O d. shifts down in a parallel way. O e. shifts up in a parallel way.
If the U.S. interest rate increases, there's a(n) in the supply of dollars and a(n) _in the demand for dollars. O a. increases; decreases O b. decreases; increases O c. decreases; decreases O d. increases; increases Oe. no effect; no effect
"The South African Reserve Bank (Sarb) lifted the repo rate by 25 basis points on Thursday to 7.25%. Three MPC members preferred the announced increase, while two voted for a 50bps increase."" The decision taken above is in line with which of the following economic schools of thought? O A. Free market economics OB. Keynesian economics O C. Marxist economics OD. Capitalistic economics Type here to search 1 a 4
The graph shows an economy's potential GDP and the aggregate supply curve. Draw an arrow that shows a rise in the price level when the money wage rate remains unchanged. Label it 1. Draw an arrow that shows a rise in the price level accompanied by the same percentage rise in the money wage rate and the money prices of other resources. Label it 2. What is the effect of an increase in the price level when the money wage rate remains unchanged? O A. Aggregate supply increases. O B. The quantity of real GDP supplied increases. Resource prices increase by the same percentage as the increase in the price level. O C. OD. Potential GDP increases. 145- 135- 125- 115- 105- 95- Price level (GDP price index, 2012=100) 85+ 18.0 Potential GDP A$ 22.0 Q 19.0 20.0 21.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.
The aggregate supply curve shows the relationship between Select one: O a. the inflation rate and the level of inputs. O b. the inflation rate and the level of aggregate output supplied. O c. the level of inputs and aggregate output. O d. the wage rate and the level of employment.
Suppose the Bank of Canada lowers its target for the overnight interest rate and longer-term interest rates in the market fall as a result. When this occurs, the commercial banks respond to in the demand for loans by... O a. An increase; selling government securities to the Bank of Canada in exchange for cash, with which they can extend new loans. O b. A decrease; buying government securities from the Bank of Canada in exchange for cash, and calling in existing loans. An increase; buying government securities from the Bank of Canada, against which they can extend new loans. O d. A decrease; selling government securities to the Bank of Canada and calling in existing loans. Oe. An increase; borrowing cash from the Bank of Canada with which they can extend new loans.
Price level (GDP price index, 2012 = 100) Potential Potential GDP, AS, GDP2 AS2 Real GDP (trillions of 2012 dollars)
QUESTION 2 Other things the same, when the price level rises, interest rates O a. fall, which means consumers will want to spend less on homebuilding. Ob.fall, which means consumers will want to spend more on homebuilding. O C. rise, which means consumers will want to spend more on homebuilding. Od.rise, which means consumers will want to spend less on homebuilding. QUESTION 3 Other things the same, if the price level rises by 2% and people were expecting it to rise by 5%, then some firms have O a. lower than desired prices, which depresses their sales. O b. lower than desired prices, which increases their sales. O. higher than desired prices, which increases their sales. d.higher than desired prices, which depresses their sales.
A price-level increase, Ceteris Paribus, will: Select one: O a. cause an upward movement along the aggregate demand curve. O b. cause a downward movement along the aggregate demand curve. O c. cause a rightward shift of the aggregate demand curve. O d. have no impact on the aggregate demand curve. O e. cause a leftward shift of the aggregate demand curve.

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The upward sloping LM function has shifted inward to the left and which of the following is likely to be the main cause: O a. All of the answers. O b. Central bank has conducted OMO to sell bonds. O . The central has stopped the QE practice. O d. The required reserve ratio has increased.