Economics Exam Paper
Final Examination of Economics
1.When the money market is drawn with the value of money on the vertical axis, if the price level is above the equilibrium level, there is an a. excess demand for money, so the price level will rise. b. excess demand for money, so the price level will fall. c. excess supply of money, so the price level will rise. d. excess supply of money, so the price level will fall.
2.According to the classical dichotomy, when the money supply doubles which of the following double? a. the price level and nominal GDP b. the price level and real GDP c. only real GDP d. only the price level
3.The money supply in Tazland is $100 billion. Nominal GDP is $800 billion and real GDP is …show more content…
None of the above is correct.
22.An economic contraction caused by a shift in aggregate demand causes prices to a. rise in the short run, and rise even more in the long run. b. rise in the short run, and fall back to their original level in the long run. c. fall in the short run, and fall even more in the long run. d. fall in the short run, and rise back to their original level in the long run.
23.According to the theory of liquidity preference, the money supply a. and money demand are positively related to the interest rate. b. and money demand are negatively related to the interest rate. c. is negatively related to the interest rate while money demand is positively related to the interest rate. d. is independent of the interest rate, while money demand is negatively related to the interest rate.
24.People will want to hold more money if the price level a. or the interest rate increases. b. or the interest rate decreases. c. increases or the interest rate decreases. d. decreases or the interest rate increases.
25.If the Federal Reserve decided to lower interest rates, it could a. buy bonds to lower the money supply. b. buy bonds to raise the money …show more content…
Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation). b. Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation). c. Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation). d. Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment).
37.In the long run, a decrease in the money supply growth rate a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left.
38.Which of the following is correct if there is an adverse supply shock? a. The short-run aggregate supply curve and the short-run Phillips curve both shift right. b. The short-run aggregate supply curve and the short-run Phillips curve both shift left. c. The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts
1.When the money market is drawn with the value of money on the vertical axis, if the price level is above the equilibrium level, there is an a. excess demand for money, so the price level will rise. b. excess demand for money, so the price level will fall. c. excess supply of money, so the price level will rise. d. excess supply of money, so the price level will fall.
2.According to the classical dichotomy, when the money supply doubles which of the following double? a. the price level and nominal GDP b. the price level and real GDP c. only real GDP d. only the price level
3.The money supply in Tazland is $100 billion. Nominal GDP is $800 billion and real GDP is …show more content…
None of the above is correct.
22.An economic contraction caused by a shift in aggregate demand causes prices to a. rise in the short run, and rise even more in the long run. b. rise in the short run, and fall back to their original level in the long run. c. fall in the short run, and fall even more in the long run. d. fall in the short run, and rise back to their original level in the long run.
23.According to the theory of liquidity preference, the money supply a. and money demand are positively related to the interest rate. b. and money demand are negatively related to the interest rate. c. is negatively related to the interest rate while money demand is positively related to the interest rate. d. is independent of the interest rate, while money demand is negatively related to the interest rate.
24.People will want to hold more money if the price level a. or the interest rate increases. b. or the interest rate decreases. c. increases or the interest rate decreases. d. decreases or the interest rate increases.
25.If the Federal Reserve decided to lower interest rates, it could a. buy bonds to lower the money supply. b. buy bonds to raise the money …show more content…
Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation). b. Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation). c. Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation). d. Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment).
37.In the long run, a decrease in the money supply growth rate a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left.
38.Which of the following is correct if there is an adverse supply shock? a. The short-run aggregate supply curve and the short-run Phillips curve both shift right. b. The short-run aggregate supply curve and the short-run Phillips curve both shift left. c. The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts