Answers to Quiz #4

Satisfactory Essays
Topics: Macroeconomics
1. According to the IS-LM model, what happens in the short run to the interest rate, income, consumption, and investment under the following circumstances? (Assume everything else is held constant.)

a. The central bank decreases the money supply. i. The interest rate ________increases_______________________ ii. Income ____________decreases__________________________ iii. Consumption ___________decreases______________________ iv. Investment ___________decreases________________________

b. The government decreases its level of expenditures. i. The interest rate _________decreases______________________ ii. Income ___________decreases___________________________ iii. Consumption __________decreases_______________________ iv. Investment ___________increases________________________

c. The government imposes a new lower level of taxes. i. The interest rate _________increases______________________ ii. Income ________________increases______________________ iii. Consumption ___________increases______________________ iv. Investment ______________decreases_____________________

d. The government increases government spending while at the same time it increases taxes by exactly the same amount. i. The interest rate __________increases_____________________ ii. Income _____________increases but by less than the change in government spending and the change in taxes_________________________ iii. Consumption __________decreases_______________________ iv. Investment ______________decreases_____________________

2. Use the following information to answer this set of questions. An economy can be described by the following equations:

C = 200 + 0.75(Y – T) I = 200 – 25r G = 100 and is constant and exogenously determined T = 100 and is constant and exogenously determined The demand for real money balances = M/P = Y – 100r M = money supply = 1000

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Quiz 4 answers

    • 454 Words
    • 3 Pages

    that does not. true false Question 3 2 / 2 pts In general, firms want their Times Interest Earned ratio to be as low as possible.<br> In general, firms want their Times Interest Earned ratio to be as low as possible. true false Question 4 2 / 2 pts A company whose Total Asset Turnover ratio is 1.0 is using its assets more efficiently than one whose ratio is 2.0.<br> A company whose Total Asset Turnover ratio is 1.0 is using its assets more efficiently than one whose ratio is 2.0. true…

    • 454 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Quiz Answer

    • 1292 Words
    • 6 Pages

    MANAGEMENT DEVELOPMENT INSTITUTE (MDI) NMP-XIII CORPORATE FINANCE FOR ENHANCING VALUE (First Quiz) (Open book) Time Allowed: 10 minutes MM: 6 Note: Attempt all the questions. All questions carry equal marks. Correct answers should be marked by darkening the circles in the answer sheet provided. 1. The primary goal of a publicly-owned firm interested in serving its stockholders should be to: a. Maximize expected total corporate…

    • 1292 Words
    • 6 Pages
    Satisfactory Essays
  • Good Essays

    A Quiz And Answers

    • 1737 Words
    • 6 Pages

    A+ quiz When you are discussing the memory capacity of a memory module, the capacity is specified in C.Bytes Explanation Memory module capacities are typically specified in an a-by-b format. Under this format, the capacity of the device (in bytes) is derived by multiplying the two numbers and then dividing by eight (or nine for memory modules with parity chips). How many devices can a single USB hub support? C.127(Missed) Explanation The universal serial bus (USB) is a high-speed serial interface…

    • 1737 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Quiz 4

    • 1255 Words
    • 6 Pages

    Quiz 4 F10 - Editing, Acting & Sound Question 1 of 20 Score: 5 (of possible 5 points) What is the imaginary, invisible wall that separates the audience from the stage called? | A. | the first wall | | B. | the imagination wall | | C. | the fourth wall | | D. | the aesthetic distance | Answer Key: C Feedback The correct answer is "C" , the fourth wall. Question 2 of 20 Score: 0 (of possible 5 points) Narration, unlike dialogue: | A. | is from a character in…

    • 1255 Words
    • 6 Pages
    Satisfactory Essays
  • Good Essays

    Quiz 4

    • 1481 Words
    • 6 Pages

    Week 5 : Capital Budgeting Tools and Analysis/Cash Flow Estimation and Risk Analysis - Quiz#4 1. Brown & Sons recently reported sales of $100 million, and net income equal to $5 million. The company has $70 million in total assets. Over the next year, the company is forecasting a 10 percent increase in sales. Since the company is at full capacity, its assets must increase in proportion to sales. The company also estimates that if sales increase 10 percent, spontaneous liabilities will increase…

    • 1481 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Quiz 4

    • 870 Words
    • 4 Pages

    dollars and the number of members of the household was estimated: WATER = 86.64 + 0.3685*INCOME + 358.5*SIZE Holding weekly income constant, by how much does water consumption (measured in litres) increase if a household gains an extra member? Give your answer correct to one decimal place. Question 2 1. The Financial Review wished to estimate the amount of annual government spending using tax revenue and level of nationwide debt. Data from 1958-2008 (inclusive) was used. All variables were measured in…

    • 870 Words
    • 4 Pages
    Satisfactory Essays
  • Satisfactory Essays

    quiz 4

    • 828 Words
    • 8 Pages

    points Suppose a firm is collecting €1250 in total revenues and the total costs of its variable factors of production are €1000 at its current level of output. In the short run, one can predict that the firm will Selected Answer: earn a profit. Correct Answer: continue to operate. Question 2 1 out of 1 points Melissa is trying to decide how to divide her time between her jobs as a night-receptionist in the dormitory, which pays €9/hr for as many hour as she chooses to work…

    • 828 Words
    • 8 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Quiz 4

    • 1484 Words
    • 11 Pages

    constraints. Answer Selected Answer: True Correct Answer: False Question 2 0 out of 2 points Fractional relationships between variables are permitted in the standard form of a linear program. Answer Selected Answer: True Correct Answer: False Question 3 2 out of 2 points In a media selection problem, instead of having an objective of maximizing profit or minimizing cost, generally the objective is to maximize the audience exposure. Answer Selected Answer: True…

    • 1484 Words
    • 11 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Quiz 4

    • 2115 Words
    • 15 Pages

    40 randomly selected stocks, which of the following is most likely to be true? Answer Selected Answer: The beta of the portfolio is equal to the average of the betas of the individual stocks. Correct Answer: The beta of the portfolio is equal to the average of the betas of the individual stocks. Question 2 2 out of 2 points Which of the following statements is CORRECT? Answer Selected Answer: During a period when a company is undergoing a change such as increasing its…

    • 2115 Words
    • 15 Pages
    Satisfactory Essays
  • Good Essays

    Quiz 4

    • 724 Words
    • 5 Pages

    A patient with a C7 spinal cord injury states he must hve the flu because he has a bad headache and nausea. The initial action of the nurse is to check the patient's temperature. take the patient's blood pressure. elevate the head of the bed to 90 degrees. call the physician. The priority nursing intervention for a patient with facial trauma is Administration of IV fluids at a rapid rate. Application of a dressing to control facial bleeding. Clearing the airway of blood and debris…

    • 724 Words
    • 5 Pages
    Good Essays