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Question 41! m8 m, K" s! k+ }
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?0 ^9 e% K& P9 w; l+ N4 H" E# R; C
A) Real gross domestic product decreases and the inflation decreases.$ N% B0 x6 `: R+ {
B) The price level decreases and output remains unchanged.
2 Q! e2 h: _. f1 D5 XC) The rate of money supply growth decreases.
* S$ I( H( i: e8 P Z) H& cD) Aggregate demand decreases.
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! C0 L5 d: _7 Y# \0 L+ c3 yQuestion 42* u/ \; t, z' U8 }3 K; ?
The velocity of money is the:
! v" D# f6 `% Y2 P% jA) rate at which the price index for consumer goods rises.- |$ C3 |" i8 E& W4 e
B) output expansion multiple of government expenditures." ]: H7 F n Z
C) average number of times a dollar is used to purchase goods and services.4 g+ d' d! j/ a- e6 X1 q! y! Y
D) number of times a dollar is taken out of the country during a year.6 Q( V( \4 I R- @& |
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Question 43
, _& i l& j4 | j7 \The advantages of a proprietorship are least likely to include:; v0 ] v7 W5 y1 C
A) ease of formation.
; y4 Q- W8 o! D" ZB) simple decision making process.! W# ?! l" p* b# z; y
C) single taxation of profits.
0 K( U% k, y. _5 VD) limited liability. $ K8 j' |9 {3 J8 b1 u; W
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Question 44
7 Y/ L2 {. [( k7 }8 s4 VIn theory, the supply of a non-renewable resource is:3 w: @9 B* z3 ?: h; V
A) fixed over a specific period of time.9 w- a" ~; N9 c/ n5 M( c4 t
B) perfectly inelastic at a price that equals the present value of the expected next-period price.
% K) x/ l8 F) f9 Y/ dC) perfectly elastic.
5 Y; `2 T+ X9 T* E7 F9 ]; RD) perfectly inelastic at the price where demand intersects supply., }4 j6 F9 A! e- |" j
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Question 45
/ ~3 H- @* `7 r# i- v' l b' ?% @Demand-pull inflation would least likely be caused by an increase in:9 T( l' E f+ ]6 V% G w2 v0 u" z
A) the prices of raw materials.
3 J& Z; l2 ~4 Q! v& PB) the money supply.& y" R& ^: b8 L9 c- p- v# z j' s! C
C) government purchases.
3 C d7 e# @8 e( o" w9 ND) foreign incomes.# ~! A- F) O, o) \" u% G
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