Quiz
Seminar 4
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Questions in this quiz (12)
1The IS curve represents
- AA) the single level of output where the goods market is in equilibrium.
- BB) the single level of output where financial markets are in equilibrium.
- CC) the combinations of output and the interest rate where the money market is in equilibrium.
- DD) the combinations of output and the interest rate where the goods market is in equilibrium.
- EE) none of the above
22) The IS curve will shift to the right when which of the following occurs?
- AA) an increase in the money supply
- BB) an increase in government spending
- CC) a reduction in the interest rate
- DD) all of the above
- EE) none of the above
3 Which of the following occurs as the economy moves leftward along a given IS curve?
- AA) an increase in the interest rate causes investment spending to decrease
- BB) an increase in the interest rate causes money demand to increase
- CC) an increase in the interest rate causes a reduction in the money supply
- DD) a reduction in government spending causes a reduction in demand for goods
- EE) an increase in taxes causes a reduction in demand for goods
4 For each interest rate, the LM curve illustrates the level of output where
- AA) the goods market is in equilibrium.
- BB) inventory investment equals zero.
- CC) money supply equals money demand.
- DD) all of the above
- EE) none of the above
5The LM curve shifts down (or, equivalently, to the right) when which of the following occurs?
- AA) an increase in taxes
- BB) an increase in output
- CC) contractionary monetary policy
- DD) expansionary monetary policy
- EE) none of the above
6 Which of the following statements is consistent with a given (i.e., fixed) LM curve?
- AA) a reduction in the interest rate causes investment spending to increase
- BB) a reduction in the interest rate causes money demand to decrease
- CC) a reduction in the interest rate causes an increase in the money supply
- DD) an increase in output causes an increase in demand for goods
- EE) an increase in output causes an increase in money demand
7 Suppose the economy is currently operating on both the LM curve and the IS curve. Which of the
following is true for this economy?- AA) Production equals demand
- BB) The quantity supplied of bonds equals the quantity demanded of bonds.
- CC) The money supply equals money demand.
- DD) Financial markets are in equilibrium.
- EE) all of the above
8 Suppose the economy is operating on the LM curve but not on the IS curve. Given this information,
we know that
.- AA) the goods market is in equilibrium and the money market is not in equilibrium.
- BB) the money market and bond markets are in equilibrium and the goods market is not in equilibrium.
- CC) the money market and goods market are in equilibrium and the bond market is not in equilibrium.
- DD) the money, bond and goods markets are all in equilibrium.
- EE) neither the money, bond, nor goods markets are in equilibrium.
9During 2008 in the United States, consumer confidence fell significantly. Which of the following
will occur as a result of this reduction in consumer confidence?- AA) the LM curve will shift up
- BB) the LM curve will shift down.
- CC) the IS curve will shift rightward.
- DD) the IS curve will shift leftward.
- EE) the IS curve will shift rightward, and the LM curve will shift up
10Suppose policy makers decide to reduce taxes. This fiscal policy action will cause which of the
following to occur?- AA) the LM curve shifts and the economy moves along the IS curve.
- BB) the IS curve shifts and the economy moves along the LM curve.
- CC) both the IS and LM curves shift.
- DD) neither the IS nor the LM curve shifts.
- EE) output will change causing a change in money demand and a shift of the LM curve
11 In late 2007 and early 2008, the U.S. Federal Reserve pursued expansionary monetary policy.
Which of the following will occur as a result of this monetary policy action?- AA) the LM curve shifts down.
- BB) the LM curve shifts up.
- CC) the IS curve shifts rightward as the interest rate falls.
- DD) the IS curve shifts leftward as the interest rate increases.
- EE) none of the above
12 Suppose there is an increase in consumer confidence. Which of the following represents the
complete list of variables that must increase in response to this increase in consumer confidence?- AA) consumption
- BB) consumption and investment
- CC) consumption, investment and output
- DD) consumption and output
- EE) consumption, output and the interest rate
Information
- Description
- Quiz on Seminar 4, created by Gio Gobronidze on 18/05/2016.
- Author
- Gio Gobronidze
- Language
- English
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