EKPENG II ISC UAS GENAP

1. Which of the following is a potential consequence of excessive government regulation on the economy?

• A. increases consumer protection

• B. enhanced market competition

• C. slower business growth and innovation

• D. improved income distribution

1. There are three distinct but related reasons a fall in the price level increases the quantity of goods and services and demanded, except:

• A. consumers are weather, which stimulates the demand for consumption goods

• B. interest rates fall, which stimulates the demand for investment goods

• C. change in the price level being intiially misinterpreted as a change in a relative price

• D. the currency depreciates, which stimulates the demand for net exports

  
  

1. Monetary policy affects the economy with a long lag, in part because

• A. proposals to change monetary policy must go through both the house and senate before being sent to the president

• B. monetary policy works through changes in interest rates,and the FED does not have the ability to change interest rates quickly

• C. changes in interest rates primarily influence investment spending, and firms make investment plans far in advance

• D. changes in interest rates primarily influence consumption spending, and household make consumption plans far in advance

1. The World Bank issued purchasing power parity conversion factor where a country with values larger than 1 means that it
   

• A. has lower price relative to US price

• B. has lower price relative to its own price at the base period

• C. has higher price relative to its own price at the base period

• D.has higher price relative to US price

The supply of money increases when

• A.the value of money increases

• B.the interest rate increases

• C.the Central Bank purchases bonds

• D.velocity increases