Econ 320 Final Exam Complete Accurate Actual
Questions And Verified Answers (100% correct
verified solutions) Brand new Version. Graded
A+
If investment does not depend on the interest rate, then the ______ curve is
______.
Select one:
a. IS; vertical
b. IS; horizontal
c. LM; vertical
d. LM; horizontal - {✔✔ANSWER✔✔}-a. IS; vertical
,If money demand does not depend on income, then the ______ curve is ______.
Select one:
a. IS; vertical
b. IS; horizontal
c. LM; vertical
d. LM; horizontal - {✔✔ANSWER✔✔}-d. LM; horizontal
If taxes are raised, but the Fed prevents income from falling by raising the money
supply, then:
a. both consumption and investment remain unchanged.
b. consumption rises but investment falls.
c. investment rises but consumption falls.
d. both consumption and investment fall. - {✔✔ANSWER✔✔}-c. investment
rises but consumption falls.
If the government wants to raise investment but keep output constant, it should:
a. adopt a loose monetary policy but keep fiscal policy unchanged.
b. adopt a loose monetary policy and a loose fiscal policy.
c. adopt a loose monetary policy and a tight fiscal policy.
d. keep monetary policy unchanged but adopt a tight fiscal policy. -
{✔✔ANSWER✔✔}-c. adopt a loose monetary policy and a tight fiscal policy.
,In the IS-LM model when M/P rises, in short-run equilibrium, in the usual case the
interest rate ______ and output ______.
a. rises; falls
b. rises; rises
c. falls; rises
d. falls; falls - {✔✔ANSWER✔✔}-c. falls; rises
In the IS-LM model, a decrease in the interest rate would be the result of a(n):
a. increase in the money supply.
b. increase in government purchases.
c. decrease in taxes.
d. increase in money demand. - {✔✔ANSWER✔✔}-a. increase in the money
supply.
In the IS-LM model, the impact of an increase in government purchases in the
goods market has ramifications in the money market, because the increase in
income causes a(n) ______ in money ______.
a. increase; supply
b. increase; demand
c. decrease; supply
d. decrease; demand - {✔✔ANSWER✔✔}-b. increase; demand
, The aggregate demand curve generally slopes downward and to the right
because, for any given money supply M a higher price level P causes a ______ real
money supply M/P, which ______ the interest rate and ______ spending.
a. lower; raises; reduces
b. higher; lowers; increases
c. lower; lowers; increases
d. higher; raises; reduces - {✔✔ANSWER✔✔}-a. lower; raises; reduces
The slope of the IS curve depends on:
a. the interest sensitivity of investment and the amount of government spending.
b. the interest sensitivity of investment and the marginal propensity to consume.
c. the interest sensitivity of investment and the tax rates.
d. tax rates and government spending. - {✔✔ANSWER✔✔}-b. the interest
sensitivity of investment and the marginal propensity to consume.
An economy's ______ equals its ______.
a. consumption; income
b. consumption; expenditure on goods and services
c. expenditure on goods; expenditures on services
d. total income; total expenditure on goods and services -
{✔✔ANSWER✔✔}-d. total income; total expenditure on goods and services
Questions And Verified Answers (100% correct
verified solutions) Brand new Version. Graded
A+
If investment does not depend on the interest rate, then the ______ curve is
______.
Select one:
a. IS; vertical
b. IS; horizontal
c. LM; vertical
d. LM; horizontal - {✔✔ANSWER✔✔}-a. IS; vertical
,If money demand does not depend on income, then the ______ curve is ______.
Select one:
a. IS; vertical
b. IS; horizontal
c. LM; vertical
d. LM; horizontal - {✔✔ANSWER✔✔}-d. LM; horizontal
If taxes are raised, but the Fed prevents income from falling by raising the money
supply, then:
a. both consumption and investment remain unchanged.
b. consumption rises but investment falls.
c. investment rises but consumption falls.
d. both consumption and investment fall. - {✔✔ANSWER✔✔}-c. investment
rises but consumption falls.
If the government wants to raise investment but keep output constant, it should:
a. adopt a loose monetary policy but keep fiscal policy unchanged.
b. adopt a loose monetary policy and a loose fiscal policy.
c. adopt a loose monetary policy and a tight fiscal policy.
d. keep monetary policy unchanged but adopt a tight fiscal policy. -
{✔✔ANSWER✔✔}-c. adopt a loose monetary policy and a tight fiscal policy.
,In the IS-LM model when M/P rises, in short-run equilibrium, in the usual case the
interest rate ______ and output ______.
a. rises; falls
b. rises; rises
c. falls; rises
d. falls; falls - {✔✔ANSWER✔✔}-c. falls; rises
In the IS-LM model, a decrease in the interest rate would be the result of a(n):
a. increase in the money supply.
b. increase in government purchases.
c. decrease in taxes.
d. increase in money demand. - {✔✔ANSWER✔✔}-a. increase in the money
supply.
In the IS-LM model, the impact of an increase in government purchases in the
goods market has ramifications in the money market, because the increase in
income causes a(n) ______ in money ______.
a. increase; supply
b. increase; demand
c. decrease; supply
d. decrease; demand - {✔✔ANSWER✔✔}-b. increase; demand
, The aggregate demand curve generally slopes downward and to the right
because, for any given money supply M a higher price level P causes a ______ real
money supply M/P, which ______ the interest rate and ______ spending.
a. lower; raises; reduces
b. higher; lowers; increases
c. lower; lowers; increases
d. higher; raises; reduces - {✔✔ANSWER✔✔}-a. lower; raises; reduces
The slope of the IS curve depends on:
a. the interest sensitivity of investment and the amount of government spending.
b. the interest sensitivity of investment and the marginal propensity to consume.
c. the interest sensitivity of investment and the tax rates.
d. tax rates and government spending. - {✔✔ANSWER✔✔}-b. the interest
sensitivity of investment and the marginal propensity to consume.
An economy's ______ equals its ______.
a. consumption; income
b. consumption; expenditure on goods and services
c. expenditure on goods; expenditures on services
d. total income; total expenditure on goods and services -
{✔✔ANSWER✔✔}-d. total income; total expenditure on goods and services
