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Question 41
1 ^ I8 i8 ~( z0 rAn 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?
# p* O! v- h# q7 T& S9 R0 z4 R0 j" AA) Real gross domestic product decreases and the inflation decreases.
; A" ^' M- t7 f; l7 d) Z1 }B) The price level decreases and output remains unchanged.; R: F6 @5 U; L# N, a
C) The rate of money supply growth decreases.
: e. i) b) F5 x! `D) Aggregate demand decreases.
3 q" X# u9 O. X& [+ P/ i n8 w6 C3 Z 0 X, e. {3 X3 t' c
Question 42& i* N1 J% s$ b9 ?9 [
The velocity of money is the:
1 M" t. |, R- P2 ]A) rate at which the price index for consumer goods rises.
+ ^$ e: Z" m- Y) F5 c. dB) output expansion multiple of government expenditures." K( J" a) g6 f& w8 w, `3 e
C) average number of times a dollar is used to purchase goods and services.: _ y2 h2 c$ ^3 I3 d9 M0 p0 u0 f
D) number of times a dollar is taken out of the country during a year.% x/ J, h' W1 F3 B0 k
; w1 _9 K* @* R4 b l h! RQuestion 43$ \3 c# z' t' A1 ?
The advantages of a proprietorship are least likely to include:( G- p9 W/ ]# i8 p, u# n, H
A) ease of formation.# j+ [$ M4 F. l! y( J, }
B) simple decision making process.: }6 c: G8 \7 L5 B4 I
C) single taxation of profits.4 F; [( k$ ?: i+ _ H7 v
D) limited liability. 7 W5 I a; H9 I) }3 w9 N& Z
8 k j) z" P4 r- r. f# nQuestion 44; n( x1 ]. \) x. L1 k& Q
In theory, the supply of a non-renewable resource is:
* }4 R- x8 h) \ KA) fixed over a specific period of time.& d1 Z) @# Y- A# t+ J2 F) Y
B) perfectly inelastic at a price that equals the present value of the expected next-period price.5 l# O& f0 L3 C) `/ U& v( E9 ^# g
C) perfectly elastic.( N3 f3 Q( U0 w5 I
D) perfectly inelastic at the price where demand intersects supply.
% K! @1 @9 v S6 q+ R: `5 W$ G( c! S6 l
Question 45! x' e% M9 d4 o3 A, w* s
Demand-pull inflation would least likely be caused by an increase in:* K% [& h1 @7 T$ F" [" l9 \/ e
A) the prices of raw materials.' F$ {2 j5 o: V6 {" O; g$ W
B) the money supply.
; O! ~! \* H2 e- D2 pC) government purchases., r' H B1 I- d1 C+ `
D) foreign incomes.! q: `8 m+ G: _: O
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