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5 Written questions

5 Matching questions

  1. What open market operation increases the money supply?
  2. New classical view of fiscal policy
  3. Budget Deficit
  4. Impact of Long run Expansionary monetary policy
  5. Velocity of Money
  1. a -cause of inflation
    -Not reduce unemployment
    -Not increase output
  2. b average number of times a dollar is used to purchase final goods and services during a year.
  3. c When the fed buys bonds.
  4. d government spending is great than government revenues
  5. e New classical economists do not believe that budget deficits will stimulate additional consumption and aggregate demand
    -people will save for the expected future tax increase (permanent income hypothesis)

5 Multiple choice questions

  1. -consumption and investment to increase
    -net exports to increase
    -asset prices to increase
  2. consumption depends on their long run expected permanent inome rather than their current income
  3. percent of population age 16 and over who is in the civilian labor force
  4. borrowers gain, lenders lose
  5. Changes in quantity are sensitive to changes in price
    -elastic curves are flatter
    -perfect = horizontal

5 True/False questions

  1. Structual Unemploymentdue to structural characteristics of the economy that prevent the matching of available jobs with available workers


  2. Money supply curveamount of money in the economy, determined by the Fed. It is vertical because it is determined by Fed policy and does not depend on the interest rate.


  3. Real Interest Ratepercentage of people in the labor force who are unemployed


  4. Marginal Propensity to Consumeamount of additonal income that is consumed
    -additonal consumption/additional income


  5. Expenditure Multipliera change in expenditures will have a greater impact than the initial change