Econs 1.5 Test

Econs 1.5 Test

University - Professional Development

40 Qs

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Econs 1.5 Test

Econs 1.5 Test

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Professional Development

University - Professional Development

Practice Problem

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40 questions

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1.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Which of the following is most likely to cause a shift to the right in the aggregate demand curve?

A. Boom in the stock market
B. Increase in taxes
C. Decrease in real estate values

2.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Which of the following best describes a fundamental assumption when monetary policy is used to influence the economy?

A. Financial markets are efficient.
B. Money is not neutral in the short run.
C. Official rates do not affect exchange rates.

3.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

According to the theory of money neutrality, money supply growth does not affect variables such as real output and employment in:

A. the long run.
B. the short run.
C. the long and short run.

4.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

In theory, setting the policy rate equal to the neutral interest rate should promote:

A. stable inflation.
B. balanced budgets.
C. greater employment.

5.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

An advantage of indirect taxes as a fiscal policy tool is that such taxes:

A. have a greater impact on aggregate spending and output than direct government spending.
B. can be adjusted almost immediately.
C. minimize interference with consumer choices.

6.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

If the GDP deflator values for year 1 and year 2 were 190 and 212.8, respectively, which of the following best describes the annual growth rate of the overall price level?

A. 5.8%.
B. 6%.
C. 12%.

7.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Monetarists favor a limited role for the government because they argue:

A. government policy responses may lag.
B. firms take time to adjust to systemic shocks to the economy.
C. resource use is efficient with marginal revenue and cost equal.

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