ECON 2200 Final Test

Question 1

1.         

Historical evidence for the U.S. economy indicates that

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2 points   

Question 2

1.         

Which of the following is most commonly used to monitor short-run changes in economic activity?

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2 points   

Question 3

1.         

During recessions investment

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2 points   

Question 4

1.         

The classical model is appropriate for analysis of the economy in the

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2 points   

Question 5

1.         

Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most economists would agree that this statement accurately describes

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2 points   

Question 6

1.         

Aggregate demand includes

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2 points   

Question 7

1.         

The model of aggregate demand and aggregate supply

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2 points   

Question 8

1.         

When the price level falls the quantity of

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2 points   

Question 9

1.         

When the price level changes, which of the following variables will change and thereby cause a change in the aggregate quantity of goods and services demanded?

Answer

2 points   

Question 10

1.         

Other things the same, a decrease in the price level makes the dollars people hold worth

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2 points   

Question 11

1.         

When the price level falls

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2 points   

Question 12

1.         

Other things the same, if the U.S. price level falls, then

Answer

2 points   

Question 13

1.         

As the price level rises,

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2 points   

Question 14

1.         

Other things the same, as the price level rises, the real value of a dollar

Answer

2 points   

Question 15

1.         

Other things the same, as the price level falls, a country's exchange rate

Answer

2 points   

Question 16

1.         

Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to desire

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2 points   

Question 17

1.         

Which of the following both shift aggregate demand left?

Answer

2 points   

Question 18

1.         

If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then

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2 points   

Question 19

1.         

The long-run aggregate supply curve shows that by itself a permanent change in aggregate demand would lead to a long-run change

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2 points   

Question 20

1.         

The long-run aggregate supply curve shifts right if

Answer

2 points   

Question 21

1.         

According to the aggregate demand and aggregate supply model, in the long run an increase in the money supply leads to

Answer

2 points   

Question 22

1.         

In the long run, technological progress

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2 points   

Question 23

1.         

If the price level rises above what was expected and nominal wages are fixed, then

Answer

2 points   

Question 24

1.         

Other things the same, when the price level rises more than expected, some firms will have

Answer

2 points   

Question 25

1.         

According to the misperceptions theory of aggregate supply, if a firm thought that inflation was going to be 5 percent and actual inflation was 6 percent, then the firm would believe that the relative price of what they produce had

Answer

2 points   

Question 26

1.         

The effects of a higher than expected price level are shown by

Answer

2 points   

Question 27

1.         

A decrease in the expected price level shifts

Answer

2 points   

Question 28

1.         

Which of the following shifts short-run, but not long-run aggregate supply right?

Answer

2 points   

Question 29

1.         

In 1986, OPEC countries increased their production of oil. This caused

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2 points   

Question 30

1.         

Keynes believed that economies experiencing high unemployment should adopt policies to

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2 points   

Question 31

1.         

The interest-rate effect

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2 points   

Question 32

1.         

The wealth effect stems from the idea that a higher price level

Answer

2 points   

Question 33

1.         

According to John Maynard Keynes,

Answer

2 points   

Question 34

1.         

While a television news reporter might state that “Today the Fed lowered the federal funds rate from 5.5 percent to 5.25 percent,” a more precise account of the Fed’s action would be as follows:

Answer

2 points   

Question 35

1.         

People choose to hold a smaller quantity of money if

Answer

2 points   

Question 36

1.         

If expected inflation is constant, then when the nominal interest rate increases, the real interest rate

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2 points   

Question 37

1.         

When the Fed sells government bonds, the reserves of the banking system

Answer

2 points   

Question 38

1.         

The opportunity cost of holding money

Answer

2 points   

Question 39

1.         

If there is excess money supply, people will

Answer

2 points   

Question 40

1.         

According to liquidity preference theory, if the price level increases, then the equilibrium interest rate

Answer

2 points   

Question 41

1.         

If the MPC = 3/5, then the government purchases multiplier is

Answer

2 points   

Question 42

1.         

If the multiplier is 5, then the MPC is

Answer

2 points   

Question 43

1.         

In a certain economy, when income is $200, consumer spending is $145.  The value of the multiplier for this economy is 6.25.  It follows that, when income is $230, consumer spending is

Answer

2 points   

Question 44

1.         

If the MPC is 0.80 and there are no crowding-out or accelerator effects, then an initial increase in aggregate demand of $100 billion will eventually shift the aggregate demand curve to the right by

Answer

2 points   

Question 45

1.         

Suppose that the MPC is 0.60; there is no investment accelerator; and there are no crowding-out effects. If government expenditures increase by $25 billion, then aggregate demand

Answer

2 points   

Question 46

1.         

The economist A.W. Phillips published a famous article in 1958 in which he showed a

Answer

2 points   

Question 47

1.         

In the short run, policy that changes aggregate demand changes

Answer

2 points   

Question 48

1.         

If policymakers decrease aggregate demand, then in the short run the price level

Answer

2 points   

Question 49

1.         

If the central bank increases the money supply, then in the short run prices

Answer

2 points   

Question 50

1.         

According to the short-run Phillips curve, if the central bank increases the money supply, then

Answer