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Questions in this quiz (8)
16. In the Keynesian-cross model, a decrease in the interest rate ______ planned investment spending and ______ the equilibrium level of income.
- AA) increases; increases
- BB) increases; decreases
- CC) decreases; decreases
- DD) decreases; increases
213. A decrease in the real money supply, other things being equal, will shift the LM curve:
- AA) downward and to the left.
- BB) upward and to the left.
- CC) downward and to the right.
- DD) upward and to the right.
311. According to the theory of liquidity preference, tightening the money supply will ______ nominal interest rates in the short run, and, according to the Fisher effect, tightening the money supply will ______ nominal interest rates in the long run.
- AA) increase; increase
- BB) increase; decrease
- CC) decrease; decrease
- DD) decrease; increase
412. An increase in consumer saving for any given level of income will shift the:
- AA) LM curve upward and to the left.
- BB) LM curve downward and to the right.
- CC) IS curve downward and to the left.
- DD) IS curve upward and to the right.
514. The U.S. recession of 2001 can be explained in part by a declining stock market and terrorist attacks. Both of these shocks can be represented in the IS–LM model by shifting the ______ curve to the ______.
- AA) LM; right
- BB) LM; left
- CC) IS; right
- DD) IS; left
615. When bond traders for the Federal Reserve seek to increase interest rates, they ______ bonds, which shifts the ______ curve to the left.
- AA) buy; IS
- BB) buy; LM
- CC) sell; IS
- DD) sell; LM
716. An increase in the money supply shifts the ______ curve to the right, and the aggregate demand curve ______.
- AA) IS; shifts to the right
- BB) IS; does not shift
- CC) LM: shifts to the right
- DD) LM; does not shift
817. A tax cut shifts the ______ to the right, and the aggregate demand curve ______.
- AA) IS; shifts to the right
- BB) IS; does not shift
- CC) LM: shifts to the right
- DD) LM; does not shift
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- Econ Exam 3 Quiz on review, created by Mahmoud Hemood on 04/06/2019.
- Author
- Mahmoud Hemood
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- English
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