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Question 41$ X2 s: E* i) o+ [ |1 C) T
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?
3 t% s- p, [& k. r& SA) Real gross domestic product decreases and the inflation decreases.
$ C {9 q8 l" zB) The price level decreases and output remains unchanged.
* } |+ s- x2 h3 P$ ZC) The rate of money supply growth decreases.1 N) N f% F6 t4 p* q/ [+ J& }7 B" Z
D) Aggregate demand decreases.
+ {- o7 c y7 b0 x5 V * c# {/ f) R& G* L n: Z
Question 426 A6 i' T3 n7 l$ _1 K7 k8 n9 i" C& b
The velocity of money is the:- Q7 u& t7 X( ]$ @, t9 k+ r
A) rate at which the price index for consumer goods rises.1 t) ?+ U7 D2 _) Z
B) output expansion multiple of government expenditures.
3 o% D$ f# p0 _) M! ?C) average number of times a dollar is used to purchase goods and services.
& D+ A" a4 }# q# H. |' W; ID) number of times a dollar is taken out of the country during a year.& v. m% \8 y7 U) H" u
2 |( o1 k# v7 Q
Question 43
! v8 s' Z' L" t& S; n0 bThe advantages of a proprietorship are least likely to include:
; h; b% V! ~/ M2 TA) ease of formation.# m* B5 O: u. Z( d3 t' `9 |$ z
B) simple decision making process.
: d- ~4 Z8 r. a7 b; {! E- pC) single taxation of profits.+ a/ ?! o* u- X/ c7 ^
D) limited liability. + c' E& b. K( j2 H Y, J# t
9 Y h t8 h' r7 h2 C* M0 o3 HQuestion 44
* e/ [# _; z v, WIn theory, the supply of a non-renewable resource is:
l: a( p# c _% ^A) fixed over a specific period of time.3 G+ ]2 W0 J3 B! S1 W
B) perfectly inelastic at a price that equals the present value of the expected next-period price.
m& y+ i% R8 E' g! q& _* ?C) perfectly elastic.
4 G5 A9 I/ x1 f1 v) D+ A ~; zD) perfectly inelastic at the price where demand intersects supply.7 ]) k( c- J5 }. f1 F
9 c, [5 W, z0 h2 U, q |; ~Question 45
' M, R; j) C% l" ` E' z! U& DDemand-pull inflation would least likely be caused by an increase in:
7 |6 {& E$ Z& ^% u) NA) the prices of raw materials.
7 c3 C7 X% d4 C' `( r2 m4 W8 S" KB) the money supply.# U6 q3 k! v' L$ [) `3 |
C) government purchases.
. R( _; x% m* `% G/ uD) foreign incomes.; D$ C+ @# v5 u; E' C4 s
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