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Question 41, j: C' ~- R# n c) y8 y
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? T* s& d8 e3 u! m7 B7 j, l. Q
A) Real gross domestic product decreases and the inflation decreases.
$ H, C) a0 |8 U4 zB) The price level decreases and output remains unchanged.
, H; V; O7 x4 D. D0 x7 DC) The rate of money supply growth decreases.2 B8 X) G3 Q; s; O; J
D) Aggregate demand decreases.
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- u; u9 c/ a4 ^, ]8 eQuestion 42
! Q- z2 }; n: L$ ^5 p+ U; B- }The velocity of money is the:( W5 r; [9 _* _2 H, T; n$ [
A) rate at which the price index for consumer goods rises.% t: j( K2 |: { B1 p! S* N
B) output expansion multiple of government expenditures.+ o% N% T+ k0 m ^7 {4 ~
C) average number of times a dollar is used to purchase goods and services./ t4 c P% I5 A( T5 {& J
D) number of times a dollar is taken out of the country during a year./ l& J5 U9 }* M( c+ t
% k& ?& l" R/ \% `4 F4 m
Question 43! w$ h& g7 V5 T$ a! z8 l* Y9 K
The advantages of a proprietorship are least likely to include:
9 G- Q7 C* T. z z1 dA) ease of formation.& J; C. H+ H7 V# ]6 _
B) simple decision making process.% z' [3 ]# B. C8 }3 y2 `" `
C) single taxation of profits.$ j6 D9 j( w7 @% _* f
D) limited liability.
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Question 44
) a r c4 x3 ^( e- Q q: NIn theory, the supply of a non-renewable resource is:$ I* F8 H7 Y- Y4 p6 Y: ^9 ~
A) fixed over a specific period of time.
: h7 V' x6 \7 m, c6 |+ p4 ]B) perfectly inelastic at a price that equals the present value of the expected next-period price.
9 I2 B' Z4 ^$ j3 J B1 H5 IC) perfectly elastic.
/ ~# \- y6 t# a+ e7 T6 ZD) perfectly inelastic at the price where demand intersects supply.1 F! R$ M) Q0 |3 b( L
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Question 45! o9 Q) C! I; |* a
Demand-pull inflation would least likely be caused by an increase in:
6 }, }; @; t( q" v" C ]A) the prices of raw materials.% u/ x2 p$ l" ?
B) the money supply.
( i7 L8 M. u, J1 U1 P3 v" u* F, |C) government purchases.& G9 W& W9 ^1 O; `% j1 F
D) foreign incomes.7 k) A- _0 `7 ^: S- y, i8 {: x9 I: {
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