曼昆经济学题库chapter24.docx

曼昆经济学题库chapter24.docx

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曼昆经济学题库chapter24

Chapter24

TheInfluenceofMonetaryandFiscalPolicyonAggregateDemand

MULTIPLECHOICE

1.Fiscalpolicyaffectstheeconomy

a.onlyintheshortrun.

b.onlyinthelongrun.

c.inboththeshortandlongrun.

d.inneithertheshortnorlongrun.

ANSWER:

c.inboththeshortandlongrun.

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2.Whichofthefollowingisnotareasontheaggregatedemandcurveslopesdownward?

Asthepricelevelincreases

a.realwagesdecline.

b.realwealthdeclines.

c.theinterestrateincreases.

d.theexchangerateincreases.

ANSWER:

a.realwagesdecline.

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3.FortheU.S.economy,whichofthefollowingisthemostimportantreasonforthedownwardslopeoftheaggregate-demandcurve?

a.thewealtheffect

b.theinterest-rateeffect

c.theexchange-rateeffect

d.thereal-wageeffect

ANSWER:

b.theinterest-rateeffect

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4.WhichofthefollowingreasonsforthedownwardslopeoftheaggregatedemandcurvewouldlikelybemoreimportantforasmalleconomythanfortheUnitedStates?

a.thewealtheffect

b.theinterest-rateeffect

c.theexchange-rateeffect

d.thereal-wageeffect

ANSWER:

c.theexchange-rateeffect

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5.Whichofthefollowingisnotaresponsethatwouldresultfromadecreaseinthepricelevelandsohelptoexplaintheslopeoftheaggregatedemandcurve?

a.Wheninterestratesfall,SleepwellHotelsdecidestobuildsomenewhotels.

b.Theexchangeratefalls,soFrenchrestaurantsinParisbuymoreIowapork.

c.Janetfeelswealthierbecauseofthepricedropandsoshedecidestoremodelherbathroom.

d.Withpricesdownandwagesfixedbycontract,GatekeeperComputersdecidestolayoffworkers.

ANSWER:

d.Withpricesdownandwagesfixedbycontract,GatekeeperComputersdecidestolayoffworkers.

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6.Thewealtheffecthelpsexplainthedownwardslopeoftheaggregatedemandcurve.Thiseffectis

a.relativelyimportantintheUnitedStatesbecauseexpendituresonconsumerdurablesisveryresponsivetochangesinwealth.

b.relativelyimportantintheUnitedStatesbecauseconsumptionspendingisalargepartofGDP.

c.relativelyunimportantintheUnitedStatesbecausemoneyholdingsareasmallpartofconsumerwealth.

d.relativelyunimportantbecauseittakesalargechangeinwealthtomakeasignificantchangeininterestrates.

ANSWER:

c.relativelyunimportantintheUnitedStatesbecausemoneyholdingsareasmallpartofconsumerwealth.

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7.Whichofthefollowingclaimsconcerningtheimportanceofeffectsthatexplaintheslopeoftheaggregatedemandcurveiscorrect?

a.Theexchange-rateeffectisrelativelysmallbecauseexportsandimportsareasmallpartofrealGDP.

b.Theinterest-rateeffectisrelativelysmallbecauseinvestmentspendingisnotveryresponsivetointerestratechanges.

c.Thewealtheffectisrelativelylargebecausemoneyholdingsareasignificantportionofmosthouseholds’wealth.

d.Noneoftheaboveiscorrect.

ANSWER:

a.Theexchange-rateeffectisrelativelysmallbecauseexportsandimportsareasmallpartofrealGDP.

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8.LiquiditypreferencerefersdirectlytoKeynes’theoryconcerning

a.theeffectsofchangesinmoneydemandandsupplyoninterestrates.

b.theeffectsofchangesinmoneydemandandsupplyonexchangerates.

c.theeffectsofwealthonexpenditures.

d.thedifferencebetweentemporaryandpermanentchangesinincome.

ANSWER:

a.theeffectsofchangesinmoneydemandandsupplyoninterestrates.

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9.Accordingtoliquiditypreferencetheory,equilibriuminthemoneymarketisachievedbyadjustmentsin

a.thepricelevel.

b.theinterestrate

c.theexchangerate

d.realwealth.

ANSWER:

b.theinterestrate

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10.Liquiditypreferencetheoryismostrelevanttothe

a.shortrunandsupposesthatthepriceleveladjuststobringmoneysupplyandmoneydemandintobalance.

b.shortrunandsupposesthattheinterestrateadjuststobringmoneysupplyandmoneydemandintobalance.

c.longrunandsupposesthatthepriceleveladjuststobringmoneysupplyandmoneydemandintobalance.

d.longrunandsupposesthattheinterestrateadjuststobringmoneysupplyandmoneydemandintobalance.

ANSWER:

b.shortrunandsupposesthattheinterestrateadjuststobringmoneysupplyandmoneydemandintobalance.

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11.Ifexpectedinflationisconstant,thenwhenthenominalinterestrateincreases,therealinterestrate

a.increasesbymorethanthechangeinthenominalinterestrate.

b.increasesbythechangeinthenominalinterestrate.

c.decreasesbythechangeinthenominalinterestrate.

d.decreasesbymorethanthechangeinthenominalinterestrate.

ANSWER:

b.increasesbythechangeinthenominalinterestrate.

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12.Ifexpectedinflationisconstantandthenominalinterestrateincreased3percentagepoints,therealinterestratewould

a.increase3percentagepoints.

b.increase,butbylessthan3percentagepoints.

c.decrease,butbylessthan3percentagepoints.

d.decreaseby3percentagepoints.

ANSWER:

a.increase3percentagepoints.

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13.Thetheoryofliquiditypreferenceassumesthatthenominalsupplyofmoneyisdeterminedbythe

a.levelofrealGDP.

b.rateofinflation.

c.interestrate.

d.theFederalReserve.

ANSWER:

d.theFederalReserve.

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14.Accordingtothetheoryofliquiditypreference,themoneysupplyis

a.positivelyrelatedtotheinterestrate.

b.negativelyrelatedtotheinterestrate.

c.independentoftheinterestrate.

d.negativelyrelatedtoboththeinterestrateandthepricelevel.

ANSWER:

c.independentoftheinterestrate.

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15.Accordingtoliquiditypreferencetheory,themoneysupplycurveis

a.upwardsloping.

b.downwardsloping.

c.vertical.

d.horizontal.

ANSWER:

c.vertical.

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16.Accordingtoliquiditypreferencetheory,themoneysupplycurvewouldshiftright

a.ifthemoneydemandcurveshiftedright.

b.onlyiftheFederalReservechosetoincreaseit.

c.iftheinterestrateincreased.

d.ifthepricelevelfellortheinterestratedecreased.

ANSWER:

b.onlyiftheFederalReservechosetoincreaseit.

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17.Accordingtoliquiditypreferencetheory,themoneysupplycurvewouldshiftiftheFed

a.engagedinopen-markettransactions.

b.changedthediscountrate.

c.changedthereserverequirement.

d.didanyoftheabove.

ANSWER:

d.didanyoftheabove.

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18.WhentheFedbuysgovernmentbonds,thereservesofthebankingsystem

a.increase,sothemoneysupplyincreases.

b.increase,sothemoneysupplydecreases.

c.decrease,sothemoneysupplyincreases.

d.decrease,sothemoneysupplydecreases.

ANSWER:

a.increase,sothemoneysupplyincreases.

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19.Liquidityrefersto

a.therelationbetweenthepriceandinterestrateofanasset.

b.theriskofanassetrelativetoitssellingprice.

c.theeasewithwhichanassetisconvertedintoamediumofexchange.

d.thesensitivityofinvestmentspendingtochangesintheinterestrate.

ANSWER:

c.theeasewithwhichanassetisconvertedintoamediumofexchange.

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20.Whichofthefollowingisthemostliquidasset?

a.capitalgoods

b.stocksandbondswithalowrisk

c.stocksandbondswithahighrisk

d.fundsinacheckingaccount

ANSWER:

d.fundsinacheckingaccount

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21.Peopleownorholdmoneyprimarilybecauseit

a.hasaguaranteednominalreturn.

b.servesasastoreofvalue.

c.candirectlybeusedtobuygoodsandservices.

d.functionsasaunitofaccount.

ANSWER:

c.candirectlybeusedtobuygoodsandservices.

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22.Whentheinterestrateincreases,theopportunitycostofholdingmoney

a.increases,sothequantityofmoneydemandedincreases.

b.increases,sothequantityofmoneydemandeddecreases.

c.decreases,sothequantityofmoneydemandedincreases.

d.decreases,sothequantityofmoneydemandeddecreases.

ANSWER:

b.increases,sothequantityofmoneydemandeddecreases.

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23.Whentheinterestratedecreases,theopportunitycostofholdingmoney

a.increases,sothequantityofmoneydemandedincreases.

b.increases,sothequantityofmoneydemandeddecreases.

c.decreases,sothequantityofmoneydemandedincreases.

d.decreases,sothequantityofmoneydemandeddecreases.

ANSWER:

d.decreases,sothequantityofmoneydemandeddecreases.

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24.Theopportunitycostofholdingmoney

a.decreaseswhentheinterestrateincreases,sopeopledesiretoholdmoreofit.

b.decreaseswhentheinterestrateincreases,sopeopledesiretoholdlessofit.

c.increaseswhentheinterestrateincreases,sopeopledesiretoholdmoreofit.

d.increaseswhentheinterestrateincreases,sopeopledesiretoholdlessofit.

ANSWER:

d.increaseswhentheinterestrateincreases,sopeopledesiretoholdlessofit.

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25.Accordingtoliquiditypreferencetheory,theopportunitycostofholdingmoneyis

a.theinterestrateonbonds.

b.theinflationrate.

c.thecosto