MonPol short quiz

S1: The aggregate supply shows combinations of the price level and output for which there is equilibrium in both the market for goods and services and the money market.

S2: Aggregate supply is shown by the horizontal LRAS curve in the long run and the upward-sloping SRAS curve in the short-run.

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: Equilibrium in the AS-AS model occurs in the long-run where the aggregate demand cure, LRAS curve, and SRAS curve all intersect.

S2: In the short, equilibrium occurs where the aggregate demand curve intersects SRAS curve

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: If expansionary monetary policy or fiscal policy is used when the economy is at full employment, the price level will decrease.

S2: Fiscal policy is the government's policy on the generation of revenues through taxation and debt, and setting the level and allocation of expenditures

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: The four branches of Finance are personal finance, entrepreneurial finance, corporate finance, public finance.

S2: Public finance is concerned with how governments raise money and allocate resources, and the effects of these decisions on the economy and society

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: Prior to the TRAIN Law, donor's and estate taxes are examples of a progressive tax system

S2: Due to the TRAIN law, donor's and estate taxes are types of a proportional tax system

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: An economic model is considered a partial equilibrium model when some key microeconomic variables, such as prices of goods and services, are exogenous.

S2: The dynamic model of money is classified as a partial-equilibrium model

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: When the central bank does not implement any policy during a recession, the price level will rise quickly.

S2: When the central bank does not implement any policy at full employment, the price level will rise quickly

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

S1: When the government cuts taxes to induce spending in a recession, the price level will rise quickly

S2: When the government does not implement any policy in a recession, output returns to full employment level quickly.

• First statement is TRUE, Second statement is FALSE

• First statement is FALSE, Second statement is TRUE

• Both statements are TRUE

• Both statements are FALSE

Which of the following statements is correct?

• In the AD-AS curve, an increase in productivity will cause the long-run aggregate supply curve to shift to the right, while an increase in the capital stock will cause the short-run aggregate supply curve to shift to the left.

• The investment-savings curve, focusing on the goods market, helps determine movement in interest rate given a change in income.

• The investment-savings curve is upward-sloping implying that an increase in the interest rate leads to an increase in output

• All of the above

• None of the above

Which of the following statements is correct?

• The general equilibrium model is defined as a model in which all prices are endogenous in markets where individuals or firms make a choice that affects the market demand or supply. The liquidity preference model is a general-equilibrium model since the price of money is classified as an endogenous variable.

• In the AD-AS model, a decrease in ATM cost, which will decrease the money demand, will cause the aggregate demand to shift to the right

• When there is a decrease in money supply in the IS-LM model, the investment-savings curve will shift upward causing an increase in interest rate and decrease in output

• All of the above

• Non of the above