Stabilization policies are policies designed to:
A. keep output constant.
B. keep prices constant.
C. move the economy closer to potential output.
D. increase trade.
Answer: C
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If the excess reserves-to-deposit ratio decreases and the monetary base is unchanged, the value of the money multiplier will ________ and the value of the money supply will ________
A) decline; decline B) decline; increase C) increase; decline D) increase; increase
With a contractionary monetary policy, as the output gap increases, the response of the central bank will tend to cause net capital outflows to ________ and cause the nominal exchange rate to ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Subjective probabilities are based on ________ and ________ data.
A) best estimates; not on B) relative frequencies; not on C) relative frequencies; on D) best estimates; on
To determine short-run equilibrium in the economy, we use an aggregate supply curve that is:
a. downward-sloping. b. vertical. c. upward-sloping. d. horizontal. e. parabolic.