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Question 41
" w7 c' q2 ]/ o# U0 T% ^0 t% Z# D; IAn economy in long-run equilibrium experiences a cost-push inflation shock. If a feedback rule monetary policy that focuses on the price level is in place, which of the following effects of the monetary policy change is least likely?/ \( ^9 _( q4 \* T" \7 S" \2 `" N
A) Real gross domestic product decreases and the inflation decreases.
+ I- W* k0 n2 h7 Z; ~* xB) The price level decreases and output remains unchanged.
6 M0 m3 F f. _) \) c* NC) The rate of money supply growth decreases.
9 T4 S q5 i5 w3 G3 S7 j6 |D) Aggregate demand decreases.
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Question 42
! e, g: e& E8 I6 q/ a0 W1 N; mThe velocity of money is the:
6 Z! h: T4 ~; w# y' q. F$ lA) rate at which the price index for consumer goods rises.* F c2 Q9 I# M' Z
B) output expansion multiple of government expenditures.! u# D1 l$ @2 E8 k! U: y' X: N. M
C) average number of times a dollar is used to purchase goods and services.
$ m4 H4 |! }8 @6 @D) number of times a dollar is taken out of the country during a year.- W( G8 b, e5 M
/ @3 [/ p! O+ jQuestion 43* y+ P& q' ^7 D' \2 F
The advantages of a proprietorship are least likely to include:
~) c! a z7 u: `9 A0 @9 }8 e- z7 V# w6 o% aA) ease of formation.* w# S6 _% s: j# P1 H1 T
B) simple decision making process.0 j# b5 b7 I8 H; r$ Z) u, j
C) single taxation of profits./ u+ J: n n3 y1 B! L' A
D) limited liability. 2 ~1 }8 `3 L9 o q
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Question 44
$ v. ?* [- v" JIn theory, the supply of a non-renewable resource is: _9 ?6 x$ N2 Y7 s
A) fixed over a specific period of time.$ E6 k0 \/ p! z; T) y7 S
B) perfectly inelastic at a price that equals the present value of the expected next-period price.4 x* @& H( M+ _& R4 J) O# n" q
C) perfectly elastic.: m" s$ _8 _% w' h% C
D) perfectly inelastic at the price where demand intersects supply.- \9 m8 c9 ^$ _8 t1 t! J5 c
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Question 45
9 J4 m4 Q- e ~0 C& p8 ]Demand-pull inflation would least likely be caused by an increase in:0 N5 M4 c5 ^$ _" i. I: X; t2 B
A) the prices of raw materials.
4 B! A8 x6 \ X$ h [B) the money supply.
& R+ f; _9 k$ u* I7 fC) government purchases.% ?1 b9 |$ l# o
D) foreign incomes.
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