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5 Written questions

5 Matching questions

  1. Effect of Unanticipated expansionary monetary policy
  2. Consumer Price Index
  3. Effects of Future Inflation
  4. Classical Economist
  5. Supply of Loanable Funds
  1. a Upward sloping, increasing interest rates will cause people to say no to investing.
  2. b Measures the cost of purchasing a market basket of goods at a point in time relative to the cost of purchasing the identical market basket during an earlier reference period
    (cost of bundle in current year / cost of same bundle in base year)
  3. c -Consumers demand more now
    -Producers supply less now
    -People factor inflation into their long term contracts
  4. d Believe prices are flexible, Economy can correct itself, Soys law: supply curves demand (production matters)
  5. e -Economy is in recession

5 Multiple choice questions

  1. has worked full or part time in the past week or is on vacation or sick leave from a regular job
  2. built in features tha automatically promote a budget deficit during a recession and a budget surplus during an expansion (without a change in policy
  3. -Y goes up, PI goes up in short run
    -Y remains constant, PI goes up in long run
  4. belief that a tax reduction financed with government debt will exert no effect on aggregate demand
  5. -the difference between price producers are willing to accept and price they actually receive
    -area above the supply but below the price

5 True/False questions

  1. Causes of High inflation are:-demand rising faster than supply
    -rapid increase in the money stock


  2. Permanent Income Hypothesisconsumption depends on their long run expected permanent inome rather than their current income


  3. Money supply curvethe minimum price that sellers are willing to accept to supply an additional unit


  4. GDP-reveals the cost durings the current period of purchasing the items included in GDP relative to the cost during the base year
    -includes capital goods and other goods purchased by businesses and government
    -(Normal GDP x GDP deflator / GDP deflator)


  5. Actual Inflation > Anticipated Inflation-Consumers demand more now
    -Producers supply less now
    -People factor inflation into their long term contracts


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