Exam (elaborations) Macroeconomics Principles of Macroeconomics

I. Multiple Choice Questions:
1.The central theme of macroeconomics is (C)
A. Theory of price determination
B. Theory of wage determination
C. Theory of national income determination
D. Theory of exchange rate determination

2.All of the following are considered "diseases" in macroeconomics except
(D)
A. High unemployment
B. Stagflation
C. Inflation
D. Price stability

3.The founder of macroeconomics is (D)
A.Adam Smith
B. Alfred Marshall
C. Karl Marx
D. John Maynard Keynes

4.An increase in government spending shifts the IS curve (B)
A.To the left
B. To the right
C. Not at all
D. Increases its slope

5.An increase in the money supply shifts the LM curve to the right, which
means (A)
A. Income increases at the same interest rate level
B. Income decreases with unchanged interest rate
C. Interest rate increases at the same income level
D. Interest rate decreases with unchanged income

6.When the price level rises, it will (B)
A.Reduce the real money supply and shift the LM curve to the right
B. Reduce the real money supply and shift the LM curve to the left
C. Increase the real money supply and shift the LM curve to the right
D. Increase the real money supply and shift the LM curve to the left

7.The aggregate demand curve slopes downward because (D)
A. Investment decreases when the price level rises
B. Consumption decreases when the price level rises
C. Net exports decrease when the price level rises
D. All of the above are correct