Macroeconomics Final

Which of the following statements about monetary and fiscal policy is most correct?
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Which of the following statements about monetary and fiscal policy is most correct?
Monetary policy can be implemented quickly, relative to fiscal policy. This is because changes at the FOMC meetings involve a smaller number of individuals than fiscal policy changes.
What is the benefit of having wealth in the form of M1 money?
There are no transactions costs when using M1 money to purchase goods or services.
Which of the following would cause the money supply to move from MS1 to MS2?
The Federal Reserve carries out open market sales.
An increase in interest rates affects the aggregate expenditure curve by...
shifting the aggregate expenditure curve​ down, reducing real GDP and increasing the price level.
There are many situations where the Federal Reserve and Congress enact contractionary policy. If policy makers are correctly enacting contractionary policy, it must mean that...
GDP is above full-employment GDP and prices are increasing.
The Federal Reserve determines that the economy is producing above full-employment GDP. Specifically, the current GDP is 15,000 and the full-employment level of GDP is 13,000. This means...
the Fed should decrease the money supply, but the exact amount they should decrease it is not directly related to the 2,000 difference in GDP and full-employment GDP.
There is an increase in the general level of prices. What is the consequence of the price increase?
the demand for money will increase, the equilibrium interest rate will​ decrease, autonomous consumption and planned investment spending will increase, aggregate expenditures will increase.
In the aggregate demand/aggregate supply model, the price level increases. This means that...
money demand increases, interest rates increase, aggregate expenditures decrease and real GDP decreases.
The price of a Toyota Prius Hybrid decreases. This will cause...
quantity demanded of Prius' to increase.
At a recent dinner with friends, they were stating that, "when housing prices rise, demand decreases and fewer homes are bought." This statement is...
false, decreasing the price of a good leads to an increase in quantity demanded, not demand.
In the past 5 years, the cost of producing 4K televisions has decreased. At the same time, many consumers are opting to watch television programs on their smartphones, tablets or laptops. Considering these two facts, assess the following claim: "The price of 4K TVs are decreasing, but it is not clear whether the quantity of 4K televisions bought and sold have increased or decreased."...The statement is correct because when there is an increase in supply and a decrease in demand, the new equilibrium price is known, but the new quantity is unknown.A house is built and sold in 2002. The house is resold in 2018. Is the sale price of the house in 2018 included in the GDP for 2018?No, GDP for 2018 includes only production that occurs during 2018.Inflation makes nominal GDP a poor measure of the increase in total production from one year to the​ next. Why?Changes in nominal GDP can occur because there are changes in prices or changes in quantities.Real GDP is able to deal with problem inflation creates when using nominal GDP. How?*All the rest* -Real GDP calculations keep prices constant, so any change in real GDP is from a change in the quantity of production. - Base year prices are applied to the value of goods and services in all years when calculating real GDP. -Price changes are separated from quantity changes when calculating real GDP.The economy is in a short-run equilibrium when...*All the rest* -GDP equals total spending. -total production equals total spending. -total production equals aggregate expenditures.Short-run, macroeconomic equilibrium is when...total output/GDP/production equals total spending/AEWhen analyzing AE, it is important to know the factors that determine C, Ip, G and NX because those factors...influence the level of AE and help us understand the GDP in the economy.Consider the graph of the consumption function. The horizontal axis of the function is measuring ​ __, while the vertical axis is measuring​ ___.real​ GDP; real consumption spending.The Y=AE line (equilibrium/45°-line) shows...all the points where aggregate expenditure equals real GDP.Which of the following is the best description of the multiplier effect?an increase in expenditures causes a larger increase in real GDP.