An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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The Federal Reserve econometric model estimates that the liquidity effect an increase in the money supply will
A) lower interest rates for 6 months to a year. B) lower interest rates permanently. C) have no effect on interest rates. D) raise interest rates after 6 months to a year.
C = $5 million + 0.9(1 - 0.1)Y I = $7 million G = $6 million NX = $1 million Based on the above data, the value of the expenditure multiplier is
A) 1.23. B) 5.26. C) 9.09. D) 11.11.
Which of the following statements provides the most accurate description of the period between the Civil War and WWI?
a. Real per capita wages were relatively flat. b. The share of immigrants was increasingly Protestant. c. Businesses became increasingly regulated. d. The average hours of work for employees in the industrial sector increased slightly.
Expansionary monetary policy involves actions that:
A. increase the money supply in order to decrease aggregate demand. B. increase the money supply in order to increase aggregate demand. C. reduce the money supply in order to decrease aggregate demand. D. reduce the money supply in order to increase aggregate demand.