1- Over time in a growing economy, the long run aggregate supply curve will
A-move so as to match the short run aggregate supply (SRAS) curve.
B-shift outward to the right.
C-shift inward to the left.
D-become increasingly steep.
2- The investment function will shift when there is a change in
A-the interest rate.
B-firms’ profit expectations.
C-the cost of borrowing.
D-the opportunity cost of retained earnings.
3- If firms’ unplanned inventories are increasing, then in a closed, private economy
A-the level of real national income will rise.
B-the level of real national income will not change in the foreseeable future.
C-actual consumption is greater than planned consumption.
D-consumers are saving more than businesses anticipated.
4- Which of the following is correct?
A- 1 + MPS = MPC
B- 1 – MPC = MPS
C- 1 – MPS = MPC + 1
D- 1 – MPS = MPC – 1
5- Which one of the following is NOT an automatic stabilizer?
A- the income tax system
B- the system of national defense procurement
C- the system of welfare payments
D- unemployment compensation programs
6- Suppose the actual federal funds rate is equal to the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that
A- monetary policy will tend to produce that inflation rate.
B- monetary policy is contractionary.
C- monetary policy is expansionary.
D- fiscal policy will result in a balanced budget.
7- If the United States exports $250 billion worth of goods and imports $420 billion worth of goods,
A- the balance of payments will be -$170 billion.
B- the balance of trade will be -$170 billion.
C- the balance of trade will be $670 billion.
D- the official reserve transaction will be $170 billion.