A) people want to hold more money. This response is shown as a movement along the money demand curve.
B) people want to hold more money. This response is shown as a shift of the money demand curve.
C) people want to hold less money. This response is shown as a movement along the money demand curve.
D) people want to hold less money. This response is shown as a shift of the money demand curve.
F) All of the above
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A) Congress passed a law requiring them to do so.
B) the President requested them to do so.
C) the money supply is hard to measure with sufficient precision.
D) changes in the interest rate change aggregate demand, but changes in the money supply do not.
F) B) and D)
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A) Keynesian in nature, and that her view is more valid for the long run than for the short run.
B) classical in nature, and that her view is more valid for the long run than for the short run.
C) Keynesian in nature, and that her view is more valid for the short run than for the long run.
D) classical in nature, and that her view is more valid for the short run than for the long run.
F) B) and C)
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A) interest rates and stock prices to rise.
B) interest rates and stock prices to fall.
C) interest rates to rise and stock prices to fall.
D) interest rates to fall and stock prices to rise.
F) A) and D)
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A) an increase in government expenditures
B) an increase in net exports
C) an increase in investment spending
D) All of the above are correct.
F) All of the above
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A) only affects aggregate demand and not aggregate supply.
B) primarily affects aggregate demand.
C) primarily effects aggregate supply.
D) only affects aggregate supply and not aggregate demand.
F) A) and C)
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A) the interest rate would be above equilibrium and the quantity of money demanded would be too large for equilibrium.
B) the interest rate would be above equilibrium and the quantity of money demanded would be too small for equilibrium.
C) the interest rate would be below equilibrium and the quantity of money demanded would be too small for equilibrium.
D) the interest rate would be below equilibrium and the quantity of money demanded would be too large for equilibrium.
F) B) and C)
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A) A higher price level shifts money demand rightward.
B) When money demand shifts rightward, the interest rate rises.
C) A higher interest rate reduces the quantity of goods and services demanded.
D) All of the above are correct.
F) A) and D)
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B) False
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A) monetary policy.
B) crowding out.
C) the investment accelerator.
D) the multiplier.
F) None of the above
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A) the interest rate rises causing aggregate demand to shift.
B) the interest rate rises causing a movement along a given aggregate-demand curve.
C) the interest rate falls causing aggregate demand to shift.
D) the interest rate falls causing a movement along a given aggregate-demand curve.
F) A) and B)
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A) "the bond market has predicted zero out of the past nine recessions."
B) "the stock market has predicted zero out of the past nine recessions."
C) "the bond market has predicted nine out of the past five recessions."
D) "the stock market has predicted nine out of the past five recessions."
F) A) and D)
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A) an increase in government purchases.
B) a decrease in net exports.
C) households saving a smaller fraction of their income.
D) a decrease in the price level.
F) C) and D)
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A) and the crowding-out effect both amplify the effects of an increase in government expenditures.
B) and the crowding-out effect both diminish the effects of an increase in government expenditures.
C) diminishes the effects of an increase in government expenditures, while the crowding-out effect amplifies the effects.
D) amplifies the effects of an increase in government expenditures, while the crowding-out effect diminishes the effects.
F) B) and D)
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A) aggregate demand increases, which the Fed could offset by increasing the money supply.
B) aggregate demand increases, which the Fed could offset by decreasing the money supply.
C) aggregate demand decreases, which the Fed could offset by increasing the money supply.
D) aggregate demand decreases, which the Fed could offset by decreasing the money supply.
F) A) and C)
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A) offset the shifts in aggregate demand and thereby eliminate unemployment.
B) offset shifts in aggregate demand and thereby stabilize the economy.
C) enhance the shifts in aggregate demand and thereby create fluctuations in output and employment.
D) enhance the shifts in aggregate demand and thereby increase economic growth
F) None of the above
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B) False
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A) only to changes in government spending.
B) to any change in spending on any component of GDP.
C) only to changes in the money supply.
D) only when the crowding-out effect is sufficiently strong.
F) All of the above
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A) aggregate demand increases, which the Fed could offset by purchasing bonds.
B) aggregate supply increases, which the Fed could offset by selling bonds.
C) aggregate demand increases, which the Fed could offset by selling bonds.
D) aggregate supply increases, which the Fed could offset by purchasing the money supply.
F) B) and C)
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