Macro Final 100% correct Answers
In the United States during the 1970's, expected
inflation rose substantially. This rise was due entirely to a supply shock not
to higher money supply growth.
Suppose the price of the product you sell stays
the same, but the prices of other goods and services rise, this means that the
According to the long-run Phillips curve what
are the long-run effects of an increase in the money supply growth rate?
National saving is the source of the supply of
loanable funds in the open-economy macroeconomic model.
Classical theory points to money supply growth
as the primary determinant of
If the U.S. inflation rate is positive and
higher than the inflation rate in Australia over the next few years then
If the U.S. were to impose an import quota on CD
Money that has value as a good is called fiat
Nearly all hyperinflations follow the same
pattern: high government spending is financed by increases in the money supply
As the price level rises, the value of money
Other things the same, if the U.S. dollar
appreciates, then U.S. goods become
According to Friedman and Phelps it is
appropriate to view the Phillips curve as a menu of options available to
A U.S. retail store uses dollars to purchase
Yuan (Chinese currency) it then uses all of these Yuan to buy toys from a
Chinese firm. Overall these transactions have
If firms and businesses became more optimistic
about the future, what would happen to prices and output in the short run?
Short-run fluctuations in output and the price
level should be viewed as deviations from the continuing long-run trends of
output growth and inflation
Net capital outflow equals net exports
Which of the following Fed actions both increase
the money supply?
A mutual fund in China buys $100,000 of bonds
sold by a U.S. corporation. This is an example of
The recession of 2008-2009 was associated with a
decrease in aggregate demand
According to rational expectations if the
government made a credible commitment to a policy of low inflation, people
would be rational enough to lower their expectations of inflation immediately.
The short run Phillips curve would shift downward and the economy would reach
low inflation quickly.
Which of the following decreases the natural
rate of unemployment?
If consumers and businesses became more
pessimistic about the future of the economy, the government could try to
stabilize output by
Under the assumptions of quantity theory, if the
money supply increases by 3 percentage points which of the following increases
by 3 percentage points?
The Fed's primary tool to change the money
supply is open-market operations, the buying and selling of bonds.
Purchasing-power parity means that the prices of
goods in terms of local currencies must be the same across countries
In 2008 the U.S. budget deficit increased.
According to the open-economy macroeconomic model
As inflation rises, people choose to hold less
money. The resources used to reduce money holdings are called shoe leather
Other things the same, an increase in the price
level shifts money demand
If Americans decided to save a larger fraction
of their income, the interest rate would fall and the dollar would depreciate
At a price level below equilibrium people want
If the short-run aggregate supply curve were to
shift left, prices and output would fall
Which of the following best illustrates money's
use as a unit of account?
How many members of the Board of Governors are
voting member of the FOMC?
According to the economist's definition, money
includes only the few types of wealth that are regularly accepted by sellers in
exchange for goods and services
If the government of a foreign country chooses
to purchase large quantities of U.S. assets, which of the following happens?
The long-run Phillips curve implies that
monetary policy influences nominal but not real variables
Net capital outflow is determined by
An open economy can only finance its investment
purchases with domestic saving
In the market for foreign currency-exchange an
increase in the demand for dollars would cause the real exchange rate to fall.
If aggregate demand shifts right farther than
If the U.S. put an import quota on refrigerators,
If some firms have sticky prices, and the price
level raises more than had been anticipated, then in the short run those firms
with sticky prices will have
When the Fed announces a target for the federal
funds rate it essentially accommodates the day-to-day shifts in money demand by
adjusting the money supply accordingly
During the financial crisis and recession of
Which of the following is included in M2 but not
Which of the following both decrease the money
An increase in the interest rate increases the
opportunity cost of holding money, so the quantity of money demanded falls
The demand curve for dollars in the market for
foreign-currency exchange is based on the logic that a decrease in the exchange
Other things the same, an increase in the money supply
cause the interest rate to rise to balance money supply and money demand.