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Question 41
: {$ K# Q& w1 b( m& gAn 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?# k+ ?" r, O; `% D U
A) Real gross domestic product decreases and the inflation decreases.% ^7 e2 ]6 c8 C/ N w6 p
B) The price level decreases and output remains unchanged.
' Q6 i1 a6 v Z' l% JC) The rate of money supply growth decreases.# u: C( S0 L( q1 D( C7 U% E
D) Aggregate demand decreases. - b' m k4 Q# l2 \
, u( E# q7 y3 }" ]0 PQuestion 42# r1 y# C# F( x7 X9 m3 U0 L, U
The velocity of money is the:; [8 Y1 k) T1 [; W }
A) rate at which the price index for consumer goods rises.
- }7 O8 Z9 k) A0 ?, P* FB) output expansion multiple of government expenditures.
P2 p8 Q0 M2 @/ i# |* i( XC) average number of times a dollar is used to purchase goods and services.
+ p, U6 S: Q& ~* B3 f6 RD) number of times a dollar is taken out of the country during a year.6 ?5 W5 v6 Z' s5 Z7 p# [
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Question 43# a6 f, K) r2 j8 R0 l
The advantages of a proprietorship are least likely to include:- X# |: i, A* k% }' L/ [
A) ease of formation.
1 h3 m& i! D8 g1 S6 ~# Y* fB) simple decision making process.
. J! }$ B# Y6 ?& bC) single taxation of profits.& l6 r) u# a- s+ b& o+ _
D) limited liability.
4 l5 w) Y7 T+ E+ {) ^ B
7 Y/ v+ }% F; v, d8 LQuestion 44# }1 ^# q% m) ?$ d0 r
In theory, the supply of a non-renewable resource is:
- r0 Z {/ P/ a! b! Z3 t9 v+ v# F& KA) fixed over a specific period of time. ~" x( Q- N% g
B) perfectly inelastic at a price that equals the present value of the expected next-period price.. u. B# I3 \' T+ A/ C. V; w
C) perfectly elastic.9 W# I( b+ A, z- P& R
D) perfectly inelastic at the price where demand intersects supply.
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Question 45. i; x, W3 m( ~) \
Demand-pull inflation would least likely be caused by an increase in:
' O& m* J( a0 M9 |5 ^A) the prices of raw materials.6 c7 m( c" O+ E4 d( N+ m
B) the money supply.
; c) b6 S' \* W" K4 A+ QC) government purchases.
/ ~! V) u3 E5 F7 v8 AD) foreign incomes.' V* m1 F3 W: c/ m. M
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