Econ 201 Ch 34 Study Guide
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Chapter 34 The Influence of Monetary and Fiscal Policy on Aggregate Demand
Multiple Choice 1. Shifts in the aggregate-demand curve can cause fluctuations in a. | neither the level of output nor the level of prices. | b. | the level of output, but not in the level of prices. | c. | the level of prices, but not in the level of output. | d. | the level of output and in the level of prices. | ANS: D PTS: 1 DIF: 1 REF: 21-0 NAT: Analytic LOC: Aggregate demand and aggregate supply
TOP: Economic fluctuations | Aggregate demand MSC: Interpretive 2. Fiscal policy affects the economy a. | only in the short run. | b. | only in the long run. | c. | in both the short and long run. | d. | in neither the short nor the long run. | ANS: C PTS: 1 DIF: 1 REF: 21-0 NAT: Analytic LOC: Monetary and fiscal policy TOP: Fiscal policy
MSC: Interpretive 3. Shifts in aggregate demand affect the price level in a. | the short run but not in the long run. | b. | the long run but not in the short run. | c. | both the short and long run. | d. | neither the short nor long run. | ANS: C PTS: 1 DIF: 2 REF: 21-0 NAT: Analytic LOC: Aggregate demand and aggregate supply
TOP: Aggregate demand and aggregate supply MSC: Definitional
How Monetary Policy Influences Aggregate Demand 1. The interest-rate effect a. | depends on the idea that increases in interest rates increase the quantity of money demanded. | b. | depends on the idea that increases in interest rates increase the quantity of money supplied. | c. | is the most important reason, in the case of the United States, for the downward slope of the aggregate-demand curve. | d. | is the least important reason, in the case of the United States, for the downward slope of the aggregate-demand curve. | ANS: C PTS: 1 DIF: 2 REF: 21-1 NAT: Analytic LOC: Aggregate demand and aggregate
Chapter 34 The Influence of Monetary and Fiscal Policy on Aggregate Demand
Multiple Choice 1. Shifts in the aggregate-demand curve can cause fluctuations in a. | neither the level of output nor the level of prices. | b. | the level of output, but not in the level of prices. | c. | the level of prices, but not in the level of output. | d. | the level of output and in the level of prices. | ANS: D PTS: 1 DIF: 1 REF: 21-0 NAT: Analytic LOC: Aggregate demand and aggregate supply
TOP: Economic fluctuations | Aggregate demand MSC: Interpretive 2. Fiscal policy affects the economy a. | only in the short run. | b. | only in the long run. | c. | in both the short and long run. | d. | in neither the short nor the long run. | ANS: C PTS: 1 DIF: 1 REF: 21-0 NAT: Analytic LOC: Monetary and fiscal policy TOP: Fiscal policy
MSC: Interpretive 3. Shifts in aggregate demand affect the price level in a. | the short run but not in the long run. | b. | the long run but not in the short run. | c. | both the short and long run. | d. | neither the short nor long run. | ANS: C PTS: 1 DIF: 2 REF: 21-0 NAT: Analytic LOC: Aggregate demand and aggregate supply
TOP: Aggregate demand and aggregate supply MSC: Definitional
How Monetary Policy Influences Aggregate Demand 1. The interest-rate effect a. | depends on the idea that increases in interest rates increase the quantity of money demanded. | b. | depends on the idea that increases in interest rates increase the quantity of money supplied. | c. | is the most important reason, in the case of the United States, for the downward slope of the aggregate-demand curve. | d. | is the least important reason, in the case of the United States, for the downward slope of the aggregate-demand curve. | ANS: C PTS: 1 DIF: 2 REF: 21-1 NAT: Analytic LOC: Aggregate demand and aggregate