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5 Written questions

5 Matching questions

  1. High and variable inflation
  2. Logrolling
  3. AD shifts right
  4. Upward sloping supply curve
  5. M1
  1. a direct positive relationship between the price of a good or service and amount suppliers are willing to produce
  2. b -reduces investment
    -distorts the information delivered by prices
    -results in less productive use of resources
  3. c -Y goes up, PI goes up in short run
    -Y remains constant, PI goes up in long run
  4. d Currency + checkable deposits + travelers checks
  5. e the practice of trading votes by a politician to get the necessary support to pass desired legislation

5 Multiple choice questions

  1. Money used to buy goods and services
    -fiat money: money that has no intrinsic value
    -More efficient to use money
  2. percentage of people in the labor force who are unemployed
  3. nominal interest rate-inflationary premium
    -price of loanable funds
    -Interest rate adjusted for inflation
  4. an issue that generates substantial benefits for a small group by generating minimal costs to a large group.
  5. a rational individual has little or no incentive to aquire information needs to cast an informed vote

5 True/False questions

  1. Quantity theory of Moneychange in money supply will cause a proportional change in the price level. PY=MV
    -Rate of Inflation + Growth rate of real output=Growth rate of money supply + growth rate of velocity


  2. Lower price level:-increase the purchasing power of money
    -Leads to a lower real interest rate, which increases consumption and investment
    -make domestically produced goods less expensive relative to foreign goods


  3. Elastic Curvesdifference between the maximum amount consumers would be willing to pay and the amount that they actually pay
    -below demand curve but above the price


  4. Nominal Interest ratepercentage of the amount borrowed that must be paid to the lender in addition to the repayment of the principle.


  5. Unemployed personActively seeking employment (in last 4 weeks) or waiting to start or return to a job


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