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Question 41
. ]0 G f' u7 M, ^+ D' S% y% lAn 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?
W6 d; V1 m' d0 [) x GA) Real gross domestic product decreases and the inflation decreases.
& a: p' V. U/ p: b$ {* XB) The price level decreases and output remains unchanged.2 f4 X l. H+ }% k, `
C) The rate of money supply growth decreases. D1 z! O: i. i+ ~+ B
D) Aggregate demand decreases.
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- E% _9 C J) m# l' _Question 42
% q4 z& v/ c8 I5 e$ GThe velocity of money is the:6 T% Y& p6 R' N3 G
A) rate at which the price index for consumer goods rises.! Z9 i' g* V2 @ Q4 @8 m
B) output expansion multiple of government expenditures.
# z+ z# W) H6 q" G) ?# NC) average number of times a dollar is used to purchase goods and services.
" t' {9 }5 c- g @) m) ZD) number of times a dollar is taken out of the country during a year.
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, i: u8 h2 ^- S4 l6 j6 wQuestion 43
! p& \, c! Y L7 ]$ NThe advantages of a proprietorship are least likely to include:
0 ]! A n% B, A3 m# C; G. TA) ease of formation.
! a+ X9 y, u! o, DB) simple decision making process.
3 z6 z& V3 [& e! C4 @. e: i4 UC) single taxation of profits.4 M4 ~* L3 D# m* A2 g/ x% @
D) limited liability.
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s7 j: R6 \ K1 tQuestion 44
# k, o* G4 P6 `, z3 b$ A" @& ?In theory, the supply of a non-renewable resource is:
1 |* d4 t2 p+ K& [) y1 @A) fixed over a specific period of time.
6 M' P2 N; Q+ s* P1 n0 bB) perfectly inelastic at a price that equals the present value of the expected next-period price.
7 y" s4 H; D2 P0 u/ d1 i3 ]C) perfectly elastic. b4 F3 J1 @9 I. `% g3 _
D) perfectly inelastic at the price where demand intersects supply.4 f+ h+ l3 t; e' j
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Question 45
: w/ Q. `! t* _' t: i& j! FDemand-pull inflation would least likely be caused by an increase in:
" O$ i& C- x. \+ ], {A) the prices of raw materials.& s: m6 j) r l$ E$ I
B) the money supply.
: w. M8 f. c9 V3 D UC) government purchases.
2 h2 D9 [; E+ e) p& a9 cD) foreign incomes.
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