Explore BrainMass
Share

Multiple Choice (3 questions)-Macroeconomics

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1) If the Fed printed too much money, money's relative price would _________ and the money price of goods would ___________.
a. fall; rise
b. rise; fall
c. fall; fall
d. rise; rise

2) If workers begin to expect more inflation in the future, then we would expect that:
a. the short-run aggregate supply curve will shift up.
b. the short-run aggregate supply curve will shift down.
c. the short-run aggregate supply curve will not shift.
d. the aggregate demand curve will shift left.

3) A fiscal policy that reduces a budget deficit could conceivably __________ income if interest rates ______________.
a. increase; fall enough
b. increase; rise enough
c. decrease; fall too much
d. decrease; rise enough

© BrainMass Inc. brainmass.com October 16, 2018, 10:10 pm ad1c9bdddf
https://brainmass.com/economics/supply-and-demand/multiple-choice-3-questions-macroeconomics-210814

Solution Preview

1. a Because there would be an over supply of money, we would see the relative value of money decline. The number of dollars needed to buy the same goods would therefore increase.

2. a When workers expect prices to ...

Solution Summary

Questions dealing with inflation, money supply, and the budget deficit

$2.19
Similar Posting

Answers and explanations for common multiple-choice Macroeconomics test questions.

Question #1
What is the short term economic outcome if price levels in the US increase and consumers buy less output as a result?
1. Aggregate demand shifts to the right.
2. Aggregate demand shifts to the left.
3. Aggregate demand does not shift, movement along this curve.

2. Question #2
Suppose that the real wealth of households increases significantly. As a result, the short term impact is that
1. Aggregate demand shifts to the right.
2. Aggregate demand shifts to the left
3. Aggregate demand does not shift, instead there is a movement along this curve.

3. Question #3
When expectations for corporate profits are diminished, economists expect that in the short term
1. Aggregate demand shifts to the right.
2. Aggregate demand shifts to the left.
3. Aggregate demand does not shift, instead there is a movement along this curve.

4. Question #4
If a series of tornados damages factories and infrastructure in the industrial regions of the US, a short term consequence is that
1. Aggregate supply shifts to the right.
2. Aggregate supply shifts to the left.
3. Aggregate supply does not shift, instead there is a movement along this curve.

5. Question #5
If companies invest in more efficient machinery and equipment, then
1. Aggregate supply shifts to the right for the short term.
2. Aggregate supply shifts to the left for the short term.
3. Aggregate supply does not shift, instead there is movement along this curve in the short term.

6. Question #6
If the Environmental Protection Agency significantly relaxes (reduces) environmental regulations, then one short term outcome is that
1. Aggregate supply shifts to the right.
2. Aggregate supply shifts to the left
3. Aggregate supply does not shift, instead there is a movement along this curve.

7. Question #7
In an effort to reduce budget deficits, the federal government decides to reduce its spending. The reduction is likely to impact both real GDP and the aggregate price level in the THE SHORT TERM. In fact:
1. Real GDP increases and the price level decreases.
2. Real GDP decreases and the price level decreases.
3. Real GDP increases and the price level increases
4. Real GDP decreases and the price level increases.

8. Question #8
Suppose that potential shareholders anticipate an increase in profitability so that there is a sharp increase in stock prices. In the short term,
1. Real GDP increases and the price level decreases.
2. Real GDP decreases and the price level decreases.
3. Real GDP increases and the price level increases.
4. Real GDP decreases and the price level increases.

9. Question #9
A widespread technological advance occurs so that the industrial sector of the economy becomes more efficient. In the short run:
1. Real GDP increases and the price level decreases.
2. Real GDP decreases and the price level decreases.
3. Real GDP increases and the price level increases.
4. Real GDP decreases and the price level increases.

10. Question #10
Remarkably, the price of an important raw material decreases. The price change leads to a short term
1. Increases in real GDP and the price level decreases.
2. Decreases in real GDP and the price level decreases.
3. Increases in real GDP and the price level increases.
4. Decreases in real GDP and the price level increases.

View Full Posting Details