Which of the following events will lead to a decrease in the demand for money?
(a) An increase in the level of aggregate output;
(b) A decrease in the supply of money;
(c) A decrease in the interest rate;
(d) A decrease in the price level.
Answer: (a) An increase in the level of aggregate output;
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Since 1933, bank failures have occurred
a. frequently b. very rarely c. once every 3 years d. every year e. once every 5 years
If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator is
a. 80, and this indicates that the price level has decreased by 20 percent since the base year. b. 80, and this indicates that the price level has increased by 80 percent since the base year. c. 125, and this indicates that the price level has increased by 25 percent since the base year. d. 125, and this indicates that the price level has increased by 125 percent since the base year.
Considering only its direct effect on income, expansionary fiscal policy tends to:
A. increase exports. B. decrease the trade deficit. C. increase imports. D. decrease imports.
Refer to the information provided in Figure 27.2 below to answer the question(s) that follow.
Figure 27.2Refer to Figure 27.2. The output multiplier is smallest when the aggregate demand curve shifts from
A. AD1 to AD2. B. AD3 to AD4. C. AD5 to AD6. D. The output multiplier is the same for all AD curve shifts shown in the figure.