ECN EXAM QUESTIONS AND CORRECT ANSWERS ALREADY PASSED
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Course
ECN
Institution
ECN
ECN EXAM QUESTIONS AND CORRECT ANSWERS ALREADY PASSED
When the Federal Reserve decreases the reserve requirement, this will
a.
decrease aggregate demand.
b.
increase the money supply.
c.
increase the discount rate.
d.
increase legal reserves. - Answer- b
All the following decrease t...
ECN EXAM QUESTIONS AND
CORRECT ANSWERS ALREADY
PASSED
When the Federal Reserve decreases the reserve requirement, this will
a.
decrease aggregate demand.
b.
increase the money supply.
c.
increase the discount rate.
d.
increase legal reserves. - Answer- b
All the following decrease the money supply except
a.
an increase in the discount rate.
b.
an increase in the reserve requirement.
c.
open market purchases by the Fed.
d.
an increase in the federal funds rate. - Answer- c
Consider the money market described in Figure 13-4. The decrease in the money
supply from MS1 to MS2 results in all of the following except
a.
a decrease in the equilibrium quantity of money.
b.
an increase in the interest rate.
c.
a higher transactions demand for money.
d.
a decrease in investments. - Answer- c
Refer to Figure 14-3. If expected inflation rate is 7 percent and the actual inflation rate is
4 percent, the economy would be located at
a.
, point A.
b.
point B.
c.
point C.
d.
point D.
e.
point E. - Answer- d
Refer to Figure 14-3. If the economy is currently at point D, then an unexpected
expansionary monetary policy will cause a movement to
a.
A
b.
B
c.
C
d.
D - Answer- c
The long run aggregate supply will not increase if
i) the labor force and capital stock increases.
ii) better technology is available.
iii) government expenditures increase.
a.
(i) only
c.
(iii) only
b.
(ii) only
d.
(i) and (ii). - Answer- c
Refer to Figure 11-2. Suppose the economy is at the equilibrium E1. Then the economy
is in ____________ and unemployment is ___________ the natural rate of
unemployment.
a.
a recession; below
c.
an expansion; below
b.
a recession; above
d.
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