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Question 41
8 \) v% ^, y5 }: I0 ?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?
) E! s0 e R7 T$ ]. b, G1 `) _) z0 WA) Real gross domestic product decreases and the inflation decreases.1 ]' C8 ^2 ?# M- R
B) The price level decreases and output remains unchanged.3 l6 a: Y& i2 g% L2 q4 Y; U. p! R
C) The rate of money supply growth decreases.
1 M; ], O0 z5 N- n7 G: @8 ~D) Aggregate demand decreases. " d% Q* s! k/ U, Y% G5 E o
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Question 421 Z: G! H( t+ m0 C! M
The velocity of money is the:; r; O) `& P" _, p, O& t [
A) rate at which the price index for consumer goods rises.
1 k5 {/ L1 y; U, E( yB) output expansion multiple of government expenditures.
. v6 e9 J, l2 m' vC) average number of times a dollar is used to purchase goods and services.
2 Y5 r+ Y. A/ c7 {7 K& XD) number of times a dollar is taken out of the country during a year." z, P; q; Z J- X. Y5 N6 ^7 y2 j
$ b- f9 E( |3 v, MQuestion 43
# ^6 ~3 s" [# z( }2 T( H( uThe advantages of a proprietorship are least likely to include:5 A5 l# j. T1 r* j
A) ease of formation., ^* U7 Q/ s) w5 }5 e
B) simple decision making process.
( q) Y2 M* I5 I& \ ^! IC) single taxation of profits.
# m9 M* I. h$ o8 eD) limited liability. ) H0 |4 [7 H( p# d
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Question 445 _# Q. t% a1 x) o, {" `
In theory, the supply of a non-renewable resource is:+ y% j. d9 N4 q Z, p; C
A) fixed over a specific period of time.
# \; W) \ A/ D5 F: x) ~' IB) perfectly inelastic at a price that equals the present value of the expected next-period price.
8 F" c% j, I+ y! W% n" bC) perfectly elastic.
/ d6 o7 R l8 u q0 L1 r. x6 _D) perfectly inelastic at the price where demand intersects supply.
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Question 45
( A3 a& f6 S; { z! g" _Demand-pull inflation would least likely be caused by an increase in:$ N) ^! s) Z- \! m0 a9 ?7 o- V
A) the prices of raw materials.
! T! T) }2 v# [) @1 x0 J* KB) the money supply.% v+ f7 C- y9 g3 k9 J; C
C) government purchases.
. @7 H* S$ F# }" R jD) foreign incomes.
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