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Question 41
: R7 d8 |- G' J! xAn 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?5 m% _! @: L$ Y! i
A) Real gross domestic product decreases and the inflation decreases.
. l% D0 i) W9 k! JB) The price level decreases and output remains unchanged.
/ L( `, T% E4 W8 RC) The rate of money supply growth decreases.9 ]2 F g, J- V
D) Aggregate demand decreases.
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Question 42
" M% q( b: C& tThe velocity of money is the:
1 B* d1 B: `1 ]+ v' R3 i0 GA) rate at which the price index for consumer goods rises.
. e/ ?& P O1 i& L9 UB) output expansion multiple of government expenditures.
3 F. n0 Z9 Y% d; uC) average number of times a dollar is used to purchase goods and services.
: |, k. A/ E5 k& ED) number of times a dollar is taken out of the country during a year., k5 z$ u- G6 ~- n
0 x, \3 S9 b: @" n! z! PQuestion 43
7 i; q: E% q9 a- E( gThe advantages of a proprietorship are least likely to include:
" v K3 j6 p: I5 A" X2 r9 |* KA) ease of formation.+ O: m# t" C& E7 Q
B) simple decision making process.7 Y( l% V' K$ s* n+ `4 v
C) single taxation of profits.
+ ~+ i! C, i0 h! e! j! yD) limited liability.
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: h) A$ b( R/ CQuestion 44
3 }! Z' Q% @/ O. o v: e" kIn theory, the supply of a non-renewable resource is:2 F, _" X0 }% u9 E: P3 B
A) fixed over a specific period of time.
0 i0 M' E1 p7 L7 {: O) O9 y8 O+ WB) perfectly inelastic at a price that equals the present value of the expected next-period price.4 t1 ~3 G- ?1 Y
C) perfectly elastic./ Q6 C& u6 T) {" B' j5 O5 B
D) perfectly inelastic at the price where demand intersects supply.* {% z1 L; ^3 w4 G
/ s8 E- e2 z* C" F4 [$ ^Question 456 T% T9 }/ c+ P$ l; G9 y
Demand-pull inflation would least likely be caused by an increase in:2 v$ z U" P/ ^
A) the prices of raw materials.
4 Q4 v7 f: C- D2 KB) the money supply.
X% w% i# y/ u4 J& k& UC) government purchases.
4 @8 g+ w7 y; Y# B0 i0 h, f: [D) foreign incomes.
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