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Quiz 6

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Question 1 (1.0 points)
For this question, assume that the economy is initially operating at the natural level of output. An increase in the price of oil will cause which of the following in the medium run?
  1. a reduction in output and a reduction in the interest rate
  2. a reduction in the interest rate
  3. a reduction in output and an increase in the aggregate price level
  4. a reduction in the aggregate price level and no change in output
  5. a reduction in unemployment, an increase in the nominal wage and an increase in the aggregate price level
Question 2 (1.0 points)
Which of the following will shift the aggregate supply curve downward?
  1. an increase in unemployment benefits
  2. an increase in firm's markup over labor costs
  3. an increase in the expected price level
  4. all of the above
  5. none of the above
Question 3 (1.0 points)
Which of the following would cause an increase in the natural level of output?
  1. an increase in taxes
  2. a decrease in government spending
  3. a decrease in taxes
  4. a decrease in the money supply
  5. none of the above
Question 4 (1.0 points)
When output is greater than the natural level:
  1. the price level is greater than the expected price level.
  2. the unemployment rate is greater than the natural unemployment rate.
  3. the price level will be lower next period than this period.
  4. all of the above
  5. none of the above
Question 5 (1.0 points)
Results obtained from the Taylor model suggest that the effects of changes in the nominal money supply are neutral after:
  1. 6 years.
  2. 2 years.
  3. 8 years.
  4. 4 years.
Question 6 (1.0 points)
In the aggregate supply relation, the current price level depends upon:
  1. consumer confidence.
  2. the markup, m.
  3. monetary policy.
  4. fiscal policy.
  5. all of the above
Question 7 (1.0 points)
Suppose the minimum wage increases. Given this event, we would expect which of the followingto occur?
  1. an increase in the aggregate price level as output increases
  2. no change in the real wage in the medium run
  3. an increase in the interest rate in the medium run
  4. all of the above
Question 8 (1.0 points)
Which of the following events will cause the largest leftward shift (as measured horizontally) of the AD curve?
  1. a 10% reduction in the nominal money supply
  2. a tax cut
  3. a 15% increase in the aggregate price level
  4. a 15% increase in the nominal wage
Question 9 (1.0 points)
If Y > Y n , we know with certainty that:
  1. P > P e .
  2. P = P e .
  3. P < P e .
Question 10 (1.0 points)
An increase in government spending will, in the short run, cause an increase in:
  1. output.
  2. the price level.
  3. the interest rate.
  4. all of the above
  5. none of the above
Question 11 (1.0 points)
Which of the following events will not change the composition of output in the medium run?
  1. an increase in the desire to save
  2. an increase in government spending
  3. a reduction in consumer confidence
  4. an increase in the money supply
  5. an increase in taxes
Question 12 (1.0 points)
An reduction in the money supply will, in the short run, cause:
  1. the wage setting curve to shift upward.
  2. the wage setting curve to shift downward.
  3. the AD curve to shift leftward.
  4. the price setting curve to shift down.
  5. the LM curve to shift downward.
Question 13 (1.0 points)
Which of the following events will cause a reduction in the aggregate price level?
  1. an increase in P e
  2. an increase in output
  3. an increase in the variable z
  4. an increase in the markup
  5. none of the above
Question 14 (1.0 points)
The paradox of saving suggests that an increased desire to save will cause in the short run:
  1. no change in the economy at all.
  2. greater investment.
  3. higher output and lower investment.
  4. lower output.
  5. greater saving.
Question 15 (1.0 points)
For this question, assume that the economy is initially operating at the natural level of output. A reduction in the government spending will cause:
  1. ambiguous effects on the real wage in the medium run.
  2. an increase in the real wage in the medium run.
  3. a reduction in the real wage in the medium run.
  4. no change in the real wage in the medium run.
Question 16 (1.0 points)
The aggregate demand curve will shift to the right when which of the following occurs?
  1. a decrease in the money supply
  2. a reduction in consumer confidence
  3. a decrease in taxes
  4. a rise in the price level
  5. a decrease in the price level
Question 17 (1.0 points)
In the aggregate supply relation, an increase in current output causes:
  1. an increase in the current price level.
  2. a shift of the aggregate supply curve.
  3. an increase in the mark-up over labor costs.
  4. an increase in the labor force.
  5. a change in the expected price level this year.
Question 18 (1.0 points)
For this question, assume that the economy is initially operating at the natural level of output. A one-time 4% reduction in the nominal money supply will cause:
  1. a 4% increase in the real money supply in the medium run.
  2. a 4% reduction in the price level in the medium run.
  3. a 4% increase in the interest rate (i) in the medium run.
  4. all of the above
Question 19 (1.0 points)
Which of the following represents the medium-run effect of an increase in the price level?
  1. a decline in output
  2. a decrease in the price level
  3. an increase in the interest rate
  4. all of the above
  5. none of the above
Question 20 (1.0 points)
When the price level is equal to the expected price level, we know that:
  1. everyone who wants a job is working.
  2. the unemployment rate is equal to the natural rate of unemployment.
  3. both the price level and the expected price level are equal to one.
  4. the goods market is in equilibrium.
  5. financial markets are in equilibrium.
Question 21 (1.0 points)
For this question, assume that the economy is initially operating at the natural level of output. An increase in the nominal money supply will cause:
  1. an increase in investment in the medium run.
  2. a reduction in the interest rate in the medium run.
  3. no change in the nominal wage in the medium run.
  4. no change in the real wage in the medium run.
Question 22 (1.0 points)
We would expect that the paradox of saving will hold in:
  1. neither the medium run nor the short run.
  2. the medium run, but not the long run.
  3. the short run, but not the medium run.
  4. both the short run and the medium run.
  5. none of the above
Question 23 (1.0 points)
"Money is neutral" means that a change in the money supply:
  1. will not change the price level in the short run.
  2. will make society neither more nor less moral than it was before.
  3. will not change output in the medium run.
  4. will not change the price level in the medium run.
  5. will not change output in the short run.
Question 24 (1.0 points)
Which of the following would cause a reduction in the short-run effects of a change in the money supply?
  1. a reduction in the interest rate sensitivity of investment
  2. a reduction in the marginal propensity to consume
  3. The IS curve is very steep.
  4. all of the above
  5. none of the above
Question 25 (1.0 points)
Simulations and econometric studies both show that money becomes neutral about ________ after a change in monetary policy.
  1. three months
  2. one year
  3. one month
  4. ten years
  5. four years
Copyright 2008, by the Contributing Authors. Cite/attribute Resource . admin. (2009, January 27). Quiz 6. Retrieved January 07, 2011, from Free Online Course Materials — USU OpenCourseWare Web site: http://ocw.usu.edu/economics/macroeconomics-for-managers/quiz6.htm. This work is licensed under a Creative Commons License Creative Commons License