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Question 417 g% U, r/ Y5 ?0 u6 [! G
An 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?2 N! Q* ?$ b+ Y& u
A) Real gross domestic product decreases and the inflation decreases.2 y4 R2 R9 B! H
B) The price level decreases and output remains unchanged.) J3 p' O8 F3 l; Y T- `0 e
C) The rate of money supply growth decreases.
. y9 M. k: G2 b; V* w7 XD) Aggregate demand decreases. : o( S$ a8 F9 i0 p
5 u. A7 n; B( V
Question 42: K ^) o5 a! I. P
The velocity of money is the:
6 I M* Q* p( U! JA) rate at which the price index for consumer goods rises.9 C# W( F3 A( p( [# C( E- Q* [
B) output expansion multiple of government expenditures.
7 `2 Z" k" i2 VC) average number of times a dollar is used to purchase goods and services.
7 i5 r6 N5 Y' ]& X. O, `D) number of times a dollar is taken out of the country during a year.) W. [1 T$ r& P+ M
* n( [8 o8 G( B
Question 43, D4 H o2 P8 V
The advantages of a proprietorship are least likely to include:
0 c H, H* L$ [, T2 g+ PA) ease of formation.$ O7 m( r" d2 D6 C1 H. s; u
B) simple decision making process. ?2 _: |' c! J4 e- Y
C) single taxation of profits.* B: W: I& i1 E( ^2 G
D) limited liability. . ^2 ~- a$ O1 h. e8 g: _
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Question 44
& c* `3 S8 w0 d' [& X, lIn theory, the supply of a non-renewable resource is:
+ `5 V, a4 I/ D1 K Z7 xA) fixed over a specific period of time.
4 D; y2 h& z3 ~B) perfectly inelastic at a price that equals the present value of the expected next-period price.0 s$ f0 I4 `; e* T4 l5 m
C) perfectly elastic.
5 g' G! I, B, Q8 q9 }D) perfectly inelastic at the price where demand intersects supply.4 i7 H" C" I0 C1 D* `
4 w. j# b; H+ c+ x6 H! b( m2 OQuestion 45
8 A7 {4 e3 o$ c: U. V0 |, W3 A2 `Demand-pull inflation would least likely be caused by an increase in:
' G* g& s8 `9 t ^A) the prices of raw materials.7 J3 S7 A, b% ~0 [) B3 {
B) the money supply.! M# Q, w" a3 w$ \, k. T. h
C) government purchases.* i8 T% {0 S2 `* z
D) foreign incomes.
C# @! w) ]* { |
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