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Question 412 W0 k7 Z- G& J! H- D3 B/ L' b& E
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?9 y+ w5 e$ a0 F6 ~
A) Real gross domestic product decreases and the inflation decreases.' y* v' x( e l K; ]0 v* ?4 l! g; n
B) The price level decreases and output remains unchanged.
$ | n" H z# x1 B4 mC) The rate of money supply growth decreases.* T2 `& K- F: Z( r% S4 C* ]
D) Aggregate demand decreases.
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7 W2 v. ^( Y1 Z0 v- F# AQuestion 42: V. W1 v) t4 F8 k
The velocity of money is the:/ O; p2 y2 u% V% q+ [8 c) @
A) rate at which the price index for consumer goods rises.
, ], @4 B. Q( l4 AB) output expansion multiple of government expenditures.: D6 h8 C: D, [# m+ u( q
C) average number of times a dollar is used to purchase goods and services.: V" u: t* ?8 N$ ^: S& [" ?
D) number of times a dollar is taken out of the country during a year.
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Question 43
3 N$ p5 t1 m) Z& E/ VThe advantages of a proprietorship are least likely to include:
1 D1 M' g) b2 ]! U$ O' b3 iA) ease of formation.
7 Y! W; K) E/ ?B) simple decision making process.8 ~( \5 H, O, ^
C) single taxation of profits.+ Q N) u3 U) D% X5 e* f; H' b
D) limited liability.
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2 e$ g6 F/ `0 F6 u4 k5 tQuestion 44
- W8 M6 ]; b: I4 L, ^$ uIn theory, the supply of a non-renewable resource is:
. O. c2 B' t- A! _2 @1 QA) fixed over a specific period of time.9 P5 ]/ ^6 H% f0 {3 c) ?
B) perfectly inelastic at a price that equals the present value of the expected next-period price.
4 C: P, f) H( e( K6 YC) perfectly elastic.
! M |6 N: B. S9 ?D) perfectly inelastic at the price where demand intersects supply.
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' U/ k9 k8 z5 H3 ]' j, h- E8 MQuestion 45
5 V- E, V& R5 o& }. Y# TDemand-pull inflation would least likely be caused by an increase in:
/ }' R. s# ]8 |: c. j0 e" |A) the prices of raw materials.( e6 I- _, w6 R
B) the money supply.5 e( H. @# ~5 l! r% k
C) government purchases.
+ u0 |* p. }. D t2 ] e6 \ KD) foreign incomes.
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