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					sample questions part 2

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____    1. Ipo did not work last week because flooding forced an evacuation of her workplace. The Bureau of Labor
           Statistics counts Ipo as
           a. unemployed and in the labor force.
           b. unemployed and not in the labor force.
           c. employed and in the labor force.
           d. employed and not in the labor force.
____    2. Suppose some country had an adult population of about 25 million, a labor-force participation rate of 60
           percent, and an unemployment rate of 6 percent. How many people were unemployed?
           a. 0.846 million
           b. 0.9 million
           c. 1.5 million
           d. 6 million
____    3. Economists at the Congressional Budget Office estimated that for 2007, the U.S. natural rate of
           unemployment was
           a. 2.6 percent.
           b. 3.1 percent.
           c. 4.8 percent.
           d. 6 percent.
____    4. Policies that reduce the time it takes unemployed workers to find new jobs
           a. can reduce both frictional unemployment and the natural rate of unemployment.
           b. can reduce frictional unemployment, but it cannot reduce the natural rate of
               unemployment.
           c. cannot reduce frictional unemployment, but it can reduce the natural rate of
               unemployment.
           d. cannot reduce either frictional unemployment or the natural rate of unemployment.
____    5. Money
           a. is a perfect store of value.
           b. is the most liquid asset.
           c. has intrinsic value, regardless of which form it takes.
           d. All of the above are correct.
____    6. Which list ranks assets from most to least liquid?
           a. currency, fine art, stocks
           b. currency, stocks, fine art
           c. fine art, currency, stocks
           d. fine art, stocks, currency
____    7. The measure of the money stock called M1 includes
           a. wealth held by people in their checking accounts.
           b. wealth held by people in their savings accounts.
           c. wealth held by people in money market mutual funds.
           d. everything that is included in M2 plus some additional items.
____    8. Credit cards are
           a. a medium of exchange.
           b. counted as part of M2 but not as part of M1.
           c. important for analyzing the monetary system.
           d. All of the above are correct.
____    9. Which of the following statements is correct?
           a. Credit cards are important for our system of payments, but they are not important for
              analyzing the monetary system.
           b. Account balances that lie behind debit cards are included in neither M1 nor M2.
           c. People who have credit cards probably hold less money on average than people who do
              not have credit cards.
           d. A debit card allows its user to postpone payment for a purchase.
____ 10. Which of the following might explain why the United States has so much currency per person?
         a. U.S. citizens are holding a lot of foreign currency.
         b. Currency may be a preferable store of wealth for criminals.
         c. People use credit and debit cards more frequently.
         d. All of the above help explain the abundance of currency.
____ 11. Which of the following is not correct?
         a. The president of the New York Fed gets to vote at every meeting of the Federal Open
            Market Committee, but this is not true of the presidents of the other regional Federal
            Reserve Banks.
         b. The Fed’s policy decisions influence the economy’s rate of inflation in the short run and
            the economy’s employment and production in the long run.
         c. The Fed’s primary tool of monetary policy is open-market operations.
         d. All of the above are correct.
____ 12. In a 100-percent-reserve banking system,
         a. banks can create money by issuing currency.
         b. banks can create money by lending out reserves.
         c. the Fed can increase the money supply with open-market sales.
         d. banks hold as many reserves as they hold deposits.
____ 13. If a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 20 percent, this action by
         itself initially makes the money supply
         a. and wealth increase by $100.
         b. and wealth decrease by $100.
         c. increase by $100 while wealth does not change.
         d. decrease by $100 while wealth decreases by $100.

            Scenario 29-2.
            The Monetary Policy of Tazi is controlled by the country’s central bank known as the Bank of Tazi. The local
            unit of currency is the Taz. Aggregate banking statistics show that collectively the banks of Tazi hold 300
            million Tazes of required reserves, 75 million Tazes of excess reserves, have issued 7,500 million Tazes of
            deposits, and hold 225 million Tazes of Tazian Treasury bonds. Tazians prefer to use only demand deposits
            and so all money is on deposit at the bank.

____ 14. Refer to Scenario 29-2. Suppose the Bank of Tazi purchased 50 million Tazes of Tazian Treasury Bonds
         from the banks. Suppose also that both the reserve requirement and the percentage of deposits held as excess
         reserves stay the same. By how much does the money supply change?
           a.   625 million Tazes
           b.   1,000 million Tazes
           c.   1,250 million Tazes
           d.   None of the above is correct.
____ 15. The discount rate is
         a. the interest rate the Fed charges banks.
         b. one divided by the difference between one and the reserve ratio.
         c. the interest rate banks receive on reserve deposits with the Fed.
         d. the interest rate that banks charge on overnight loans to other banks.
____ 16. Deflation
         a. increases incomes and enhances the ability of debtors to pay off their debts.
         b. increases incomes and reduces the ability of debtors to pay off their debts.
         c. decreases incomes and enhances the ability of debtors to pay off their debts.
         d. decreases incomes and reduces the ability of debtors to pay off their debts.
____ 17. If the price index in some country were falling over time, economists would say that country had
         a. disinflation.
         b. deflation.
         c. a contraction.
         d. an inverted inflation.
____ 18. When the money market is drawn with the value of money on the vertical axis, a decrease in the price level
         causes a
         a. movement to the right along the money demand curve.
         b. movement to the left along the money demand curve.
         c. shift to the right of the money supply curve.
         d. shift to the left of the money supply curve.
____ 19. As the price level decreases, the value of money
         a. increases, so people want to hold more of it.
         b. increases, so people want to hold less of it.
         c. decreases, so people want to hold more of it.
         d. decreases, so people want to hold less of it.
____ 20. When the money market is drawn with the value of money on the vertical axis, if the money supply rises
         a. the price level and the value of money rise.
         b. the price level rises and the value of money falls.
         c. the price level falls and the value of money rises.
         d. the price level and the value of money fall.

           Figure 30-2. On the graph, MS represents the money supply and MD represents money demand. The usual
           quantities are measured along the axes.
                                   MS
             1.125

                1

             0.875

              0.75

             0.625

               0.5
                                                          MD
             0.375                                             2
              0.25                                        MD1
             0.125


                                   5,000



____ 21. Refer to Figure 30-2. Which of the following events could explain a shift of the money-demand curve from
         MD1 to MD2?
         a. an increase in the value of money
         b. a decrease in the price level
         c. an open-market purchase of bonds by the Federal Reserve
         d. None of the above is correct.
____ 22. On a given morning, Franco sold 40 pairs of shoes for a total of $80 at his shoe store.
         a. The $80 is a real variable. The quantity of shoes is a nominal variable.
         b. The $80 is a nominal variable. The quantity of shoes is a real variable.
         c. Both the $80 and the quantity of shoes are nominal variables.
         d. Both the $80 and the quantity of shoes are real variables.
____ 23. According to the classical dichotomy, which of the following is not influenced by monetary factors?
         a. nominal GDP and nominal interest rates
         b. real wages and real GDP
         c. the price level and nominal GDP
         d. None of the above is correct.
____ 24. The evidence from hyperinflations indicates that money growth and inflation
         a. are positively related, which is consistent with the quantity theory of money.
         b. are positively related, which is not consistent with the quantity theory of money.
         c. are not related in a discernible fashion, which is consistent with the quantity theory of
            money.
         d. are not related in a discernible fashion, which is not consistent with the quantity theory of
            money.
____ 25. Based on past experience, if a country is experiencing hyperinflation, then which of the following would be a
         reasonable guess?
         a. The country has high money supply growth.
         b. Inflation is acting like a tax on everyone who holds money.
         c. The government is printing money to finance its expenditures.
         d. All of the above are correct.
____ 26. The nominal interest rate is 3.5 percent and the inflation rate is 2 percent. What is the real interest rate?
         a. 7 percent
         b. 5.5 percent
         c. 1.75 percent
         d. 1.5 percent
____ 27. Menu costs refers to
         a. resources used by people to maintain lower money holdings when inflation is high.
         b. resources used to price shop during times of high inflation.
         c. the distortion in incentives created by inflation when taxes do not adjust for inflation.
         d. the cost of more frequent price changes induced by higher inflation.
____ 28. If     Saudi Arabia had positive net exports last year, then it
         a.     sold more abroad than it purchased abroad and had a trade surplus.
         b.     sold more abroad than it purchased abroad and had a trade deficit.
         c.     bought more abroad than it sold abroad and had a trade surplus.
         d.     bought more abroad than it sold abroad and had a trade deficit.
____ 29. Suppose that a country imports $75 million of goods and services and exports $100 million of goods and
         services. What is the value of net exports?
         a. $175 million
         b. $75 million
         c. $25 million
         d. -$25 million

            Table 31-1
                                     Argentinean Trade Flows
            Goods                                 Services
            Purchased           $40 billion       Purchased            $20 billion
            Abroad                                Abroad
            Sold Abroad         $10 billion       Sold Abroad          $25 billion

____ 30. Refer to Table 31-1. What are Argentina’s net exports?
         a. $30 billion
         b. $5 billion
         c. -$5 billion
         d. -$25 billion
____ 31. Bob, a Greek citizen, opens a restaurant in Chicago. His expenditures
         a. increase U.S. net capital outflow and have no affect on Greek net capital outflow.
         b. increase U.S. net capital outflow and increase Greek net capital outflow.
         c. increase U.S. net capital outflow, but decrease Greek net capital outflow.
         d. decrease U.S. net capital outflow, but increase Greek net capital outflow.
____ 32. The country of Sylvania has a GDP of $900, investment of $200, government purchases of $200, and net
         capital outflow of -$100. What is consumption?
         a. $700
         b. $600
         c. $500
         d. $300
____ 33. If the Canadian nominal exchange rate does not change, but prices rise faster in Canada than in all other
         countries, then the Canadian real exchange rate
         a. does not change.
         b. rises.
         c. declines.
         d. There is not enough information to answer the question
____ 34. Other things the same, a lower real interest rate decreases the quantity of
         a. loanable funds demanded.
         b. loanable funds supplied.
         c. domestic investment.
         d. net capital outflow.
____ 35. Other things the same, an increase in the U.S. real interest rate
         a. raises net capital outflow which decreases the quantity of loanable funds demanded.
         b. raises net capital outflow which increases the quantity of loanable funds demanded.
         c. lowers net capital outflow which decreases the quantity of loanable funds demanded.
         d. lowers net capital outflow which increases the quantity of loanable funds demanded.
____ 36. When the real exchange rate for the dollar depreciates, U.S. goods become
         a. less expensive relative to foreign goods, which makes exports rise and imports fall.
         b. less expensive relative to foreign goods, which makes exports fall and imports rise.
         c. more expensive relative to foreign goods, which makes exports rise and imports fall.
         d. more expensive relative to foreign goods, which makes exports fall and imports rise.
____ 37. In the open-economy macroeconomic model, if the U.S. interest rate rises, then its
         a. net capital outflow rises, so the supply of dollars in the market for foreign exchange shifts
              right.
         b. net capital outflow rises, so the demand for dollars in the market for foreign exchange
              shifts right.
         c. net capital outflow falls, so the supply of dollars in the market for foreign exchange shifts
              left.
         d. net capital outflow falls, so the demand for dollars in the market for foreign exchange
              shifts left.
____ 38. When a country’s government budget deficit increases,
         a. the real exchange rate of its currency and its net exports increase.
         b. the real exchange rate of its currency and its net exports decrease.
         c. the real exchange rate of its currency increases and its net exports decrease.
         d. the real exchange rate of its currency decreases and its net exports increase.
____ 39. If a country’s budget deficit decreases, then the exchange rate
         a. rises, which raises net exports.
         b. rises, which reduces net exports.
         c. falls, which raises net exports.
         d. falls, which reduces net exports.
____ 40. If a government increases its budget deficit, then domestic interest rates
         a. and net exports rise.
         b. rise and net exports fall.
         c. fall and net exports rise.
         d. and net exports fall.
____ 41. Most economists use the aggregate demand and aggregate supply model primarily to analyze
         a. short-run fluctuations in the economy.
         b. the effects of macroeconomic policy on the prices of individual goods.
         c. the long-run effects of international trade policies.
         d. productivity and economic growth.
____ 42. Historical evidence for the U.S. economy indicates that
         a. recessions have occurred roughly once every six years since the 1960s.
         b. the unemployment rate usually decreases during a recession and increases shortly after the
             recession ends.
         c. real GDP usually remains roughly constant during a recession and decreases shortly after
             the recession ends.
         d. changes in real GDP over the business cycle are largely attributable to changes in
             investment over the business cycle.
____ 43. In the last half of 1999, the U.S. unemployment rate was about 4 percent. Historical experience suggests that
         this is
         a. above the natural rate, so real GDP growth was likely low.
         b. above the natural rate, so real GDP growth was likely high.
         c. below the natural rate, so real GDP growth was likely low.
         d. below the natural rate, so real GDP growth was likely high.
____ 44. Other things the same, a fall in an economy's overall level of prices tends to
         a. raise both the quantity demanded and supplied of goods and services.
         b. raise the quantity demanded of goods and services, but lower the quantity supplied.
         c. lower the quantity demanded of goods and services, but raise the quantity supplied.
         d. lower both the quantity demanded and the quantity supplied of goods and services.
____ 45. Which of the following effects helps to explain the downward slope of the aggregate-demand curve?
         a. the exchange-rate effect
         b. the wealth effect
         c. the interest-rate effect
         d. All of the above are correct.
____ 46. The aggregate quantity of goods and service demanded changes as the price level falls because
         a. real wealth rises, interest rates rise, and the dollar appreciates.
         b. real wealth rises, interest rates fall, and the dollar depreciates.
         c. real wealth falls, interest rates rise, and the dollar appreciates.
         d. real wealth falls, interest rates fall, and the dollar depreciates.
____ 47. Other things the same, the aggregate quantity of goods demanded in the U.S. increases if
         a. real wealth rises.
         b. the interest rate rises.
         c. the dollar appreciates.
         d. All of the above are correct.
____ 48. The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than
         expected,
         a. production is more profitable and employment rises.
         b. production is more profitable and employment falls.
         c. production is less profitable and employment rises.
         d. production is less profitable and employment falls.
____ 49. In 2008 due to an economic slowdown and fear of a recession, the government
         a. gave a tax rebate. Tax cuts shift aggregate demand right.
         b. reduced tax deductions. Tax cuts shift aggregate demand right.
         c. gave a tax rebate. Tax cuts shift aggregate demand left.
         d. reduced tax deductions. Tax cuts shift aggregate demand left.
____ 50. In the mid-1970s the price of oil rose dramatically. This
         a. shifted aggregate supply left.
         b. caused U.S. prices to fall.
         c. was the consequence of OPEC increasing oil production.
         d. All of the above are correct.
____ 51. A decrease in government spending initially and primarily shifts
         a. aggregate demand to the right.
         b. aggregate demand to the left.
         c. aggregate supply to the right.
         d. neither aggregate demand nor aggregate supply.
____ 52. The price of imported oil rises. If the government wanted to stabilize output, which of the following could it
         do?
         a. increase government expenditures or increase the money supply
         b. increase government expenditures or decrease the money supply
         c. decrease government expenditures or increase the money supply
         d. decrease government expenditures or decrease the money supply
____ 53. The quantity of money has no real impact on things people really care about like whether or not they have a
         job. Most economists would agree that this statement is appropriate concerning
         a. both the short run and the long run.
         b. the short run, but not the long run.
         c. the long run, but not the short run.
         d. neither the long run nor the short run.
____ 54. The aggregate demand and aggregate supply graph has
         a. the price level on the horizontal axis. The price level can be measured by the GDP
            deflator.
         b. the price level on the horizontal axis. The price level can be measured by real GDP.
         c. the price level on the vertical axis. The price level can be measured by the GDP deflator.
         d. the price level on the vertical axis. The price level can be measured by GDP.
____ 55. As the price level falls
         a. people are more willing to lend, so interest rates rise.
         b. people are more willing to lend, so interest rates fall.
         c. people are less willing to lend, so interest rates fall.
         d. people are less willing to lend, so interest rates rise.
____ 56. Other things the same, if the price level rises, then domestic interest rates
         a. rise, so domestic residents will want to hold more foreign bonds.
         b. rise, so domestic residents will want to hold fewer foreign bonds.
         c. fall, so domestic residents will want to hold more foreign bonds.
         d. fall, so domestic residents will want to hold fewer foreign bonds.
____ 57. When taxes decrease, consumption
         a. increases, so aggregate demand shifts right.
           b. increases, so aggregate supply shifts right.
           c. decreases, so aggregate demand shifts left.
           d. decreases, so aggregate supply shifts left.
____ 58. The long-run aggregate supply curve would shift right if immigration from abroad
         a. increased or Congress made a substantial increase in the minimum wage.
         b. decreased or Congress abolished the minimum wage.
         c. increased or Congress abolished the minimum wage.
         d. decreased or Congress made a substantial increase in the minimum wage.
____ 59. The aggregate supply curve is upward sloping in
         a. the short and long run.
         b. neither the short nor long run.
         c. the long run, but not the short run.
         d. the short run, but not the long run.

           Figure 33-2.

                   P

                                                     AS1
                                     LRAS

                                                      AS2

              P1                     A
              P2                          B


                                                      AD



                                   Y1 Y2                     Y


____ 60. Refer to Figure 33-2. The appearance of the long-run aggregate-supply (LRAS) curve
         a. is inconsistent with the concept of monetary neutrality.
         b. is consistent with the idea that point A represents a long-run equilibrium but not a
            short-run equilibrium when the relevant short-run aggregate-supply curve is AS1.
         c. indicates that Y1 is the natural rate of output.
         d. All of the above are correct.

           The Stock Market Boom of 2014
           Imagine that in 2014 the economy is in long-run equilibrium. Then stock prices rise more than expected and
           stay high for some time.

____ 61. Refer to Stock Market Boom 2014. What happens to the expected price level and what impact does this
         have on wage bargaining?
         a. The expected price level falls. Bargains are struck for higher wages.
         b. The expected price level falls. Bargains are struck for lower wages.
           c. The expected price level rises. Bargains are struck for higher wages.
           d. The expected price level rises. Bargains are struck for lower wages.

           Pessimism
           Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions,
           and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level
           of pessimism for some time.

____ 62. Refer to Pessimism. How is the new long-run equilibrium different from the original one?
         a. both price and real GDP are higher.
         b. both price and real GDP are lower.
         c. the price level is the same and GDP is lower.
         d. the price level is lower and real GDP is the same.
____ 63. Which of the following would not be an expected response from a decrease in the price level and so help to
         explain the slope of the aggregate-demand curve?
         a. When interest rates fall, Sleepwell Hotels decides to build some new hotels.
         b. The exchange rate falls, so French restaurants in Paris buy more Iowa pork.
         c. Janet feels wealthier because of the price-level decrease and so she decides to remodel her
             bathroom.
         d. With prices down and wages fixed by contract, Millio’s Frozen Pizzas decides to lay off
             workers.

           Figure 34-3.




____ 64. Refer to Figure 34-3. Which of the following sequences (numbered arrows) shows the logic of the
         interest-rate effect?
         a. 1, 2, 3, 4
         b. 1, 4, 3, 2
         c. 3, 4, 2, 1
         d. 3, 2, 1, 4
____ 65. If the Fed conducts open-market purchases, then which of the following quantities increase(s)?
         a. interest rates, prices, and investment spending
         b. interest rates and prices, but not investment spending
         c. prices and investment spending, but not interest rates
         d. interest rates, but not prices or investment spending
____ 66. If the MPC = 3/5, then the government purchases multiplier is
            a.   5/3.
            b.   5/2.
            c.   5.
            d.   15.
____ 67. If the multiplier is 2.5, then the MPC is
         a. 0.2.
         b. 0.6.
         c. 0.75.
         d. 1.00.

            Figure 34-5. On the left-hand graph, MS represents the supply of money and MD represents the demand for
            money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along
            the axes of both graphs.
                                                                               P
                               MS




            r2


            r1                                  MD
                                                  2                                                                    AD
                                                                                                                            2
                                                                                                                  AD3
                                                MD
                                                  1                                                          AD
                                                                                                                  1




                                                                                                                                Y


____ 68. Refer to Figure 34-5. Suppose the multiplier is 3 and the government increases its purchases by $25 billion.
         Also, suppose the AD curve would shift from AD1 to AD2 if there were no crowding out; the AD curve
         actually shifts from AD1 to AD3 with crowding out. Finally, assume the horizontal distance between the
         curves AD1 and AD3 is $30 billion. The extent of crowding out, for any particular level of the price level, is
         a. $25 billion.
         b. $30 billion.
         c. $45 billion.
         d. $60 billion.
____ 69. Sometimes during wars, government expenditures are larger than normal. To reduce the effects this spending
         creates on interest rates,
         a. the Federal Reserve could increase the money supply by buying bonds.
         b. the Federal Reserve could increase the money supply by selling bonds.
         c. the Federal Reserve could decrease the money supply by buying bonds.
         d. the Federal Reserve could decrease the money supply by selling bonds.
____ 70. Suppose that the MPC is 0.60; there is no investment accelerator; and there are no crowding-out effects. If
         government expenditures increase by $25 billion, then aggregate demand
         a. shifts rightward by $62.5 billion.
            b. shifts rightward by $50.0 billion.
            c. shifts rightward by $32.5 billion.
            d. None of the above is correct.
____ 71. Assume the MPC is 0.625. Assuming only the multiplier effect matters, a decrease in government purchases
         of $10 billion will shift the aggregate demand curve to the
         a. left by about $13.3 billion.
         b. left by about $26.7 billion.
         c. right by about $36.7 billion.
         d. None of the above is correct.
____ 72. Assume the multiplier is 5 and that the crowding-out effect is $20 billion. An increase in government
         purchases of $10 billion will shift the aggregate-demand curve to the
         a. right by $150 billion.
         b. right by $70 billion.
         c. right by $30 billion.
         d. None of the above is correct.
____ 73. The multiplier effect
         a. and the crowding-out effect both amplify the effects of an increase in government
            expenditures.
         b. and the crowding-out effect both diminish the effects of an increase in government
            expenditures.
         c. diminishes the effects of an increase in government expenditures, while the crowding-out
            effect amplifies the effects.
         d. amplifies the effects of an increase in government expenditures, while the crowding-out
            effect diminishes the effects.
____ 74. If taxes
         a. increase, then consumption increases, and aggregate demand shifts rightward.
         b. increase, then consumption decreases, and aggregate demand shifts leftward.
         c. decrease, then consumption increases, and aggregate demand shifts leftward.
         d. decrease, then consumption decreases, and aggregate demand shifts rightward.
____ 75. Keynes used the term "animal spirits" to refer to
         a. policy makers harming the economy in the pursuit of self interest.
         b. arbitrary changes in attitudes of household and firms.
         c. mean-spirited economists who believed in the classical dichotomy.
         d. firms' relentless efforts to maximize profits.
____ 76. Suppose there were a large decline in net exports. If the Fed wanted to stabilize output, it could
         a. buy bonds to raise interest rates.
         b. buy bonds to lower interest rates.
         c. sell bonds to raise interest rates.
         d. sell bonds to lower interest rates.

            For the following questions, use the diagram below:

            Figure 34-6.
____ 77. Refer to Figure 34-6. If the economy is at point b, a policy to restore full employment would be
         a. an increase in the money supply.
         b. a decrease in government purchases.
         c. an increase in taxes.
         d. All of the above are correct.
sample questions part 2
Answer Section

MULTIPLE CHOICE

      1. ANS:   C               PTS: 1              DIF: 2                  REF: 28-1
         NAT:   Analytic        LOC: Unemployment and inflation
         TOP:   Bureau of Labor Statistics | Employment | Labor force       MSC: Interpretive
      2. ANS:   B               PTS: 1              DIF: 3                  REF: 28-1
         NAT:   Analytic        LOC: Unemployment and inflation             TOP: Unemployment
         MSC:   Analytical
      3. ANS:   C               PTS: 1              DIF: 1                  REF: 28-1
         NAT:   Analytic        LOC: Unemployment and inflation             TOP: Natural rate of unemployment
         MSC:   Definitional
      4. ANS:   A               PTS: 1              DIF: 2                  REF: 28-2
         NAT:   Analytic        LOC: Unemployment and inflation
         TOP:   Public policy | Frictional unemployment | Natural rate of unemployment
         MSC:   Interpretive
      5. ANS:   B               PTS: 1              DIF: 2                  REF: 29-1
         NAT:   Analytic        LOC: The role of money                      TOP: Money | Liquidity
         MSC:   Interpretive
      6. ANS:   B               PTS: 1              DIF: 1                  REF: 29-1
         NAT:   Analytic        LOC: The role of money                      TOP: Liquidity
         MSC:   Definitional
      7. ANS:   A               PTS: 1              DIF: 1                  REF: 29-1
         NAT:   Analytic        LOC: The role of money                      TOP: Money supply
         MSC:   Definitional
      8. ANS:   C               PTS: 1              DIF: 2                  REF: 29-1
         NAT:   Analytic        LOC: The role of money                      TOP: Money
         MSC:   Interpretive
      9. ANS:   C               PTS: 1              DIF: 1                  REF: 29-1
         NAT:   Analytic        LOC: The role of money                      TOP: Money supply
         MSC:   Definitional
     10. ANS:   B               PTS: 1              DIF: 1                  REF: 29-1
         NAT:   Analytic        LOC: The role of money                      TOP: Currency
         MSC:   Definitional
     11. ANS:   B               PTS: 1              DIF: 2                  REF: 29-2
         NAT:   Analytic        LOC: Monetary and fiscal policy             TOP: Federal Reserve System
         MSC:   Interpretive
     12. ANS:   D               PTS: 1              DIF: 1                  REF: 29-3
         NAT:   Analytic        LOC: Monetary and fiscal policy             TOP: Reserves
         MSC:   Definitional
     13. ANS:   C               PTS: 1              DIF: 2                  REF: 29-3
         NAT:   Analytic        LOC: Monetary and fiscal policy             TOP: Money multiplier
         MSC:   Definitional
     14. ANS:   B               PTS: 1              DIF: 2                  REF: 29-3
         NAT:   Analytic        LOC: Monetary and fiscal policy             TOP: Reserve ratio
         MSC:   Applicative
15. ANS:   A             PTS: 1                   DIF: 1        REF: 29-3
    NAT:   Analytic      LOC: Monetary and fiscal policy        TOP: Discount rate
    MSC:   Definitional
16. ANS:   D             PTS: 1                   DIF: 2        REF: 30-0
    NAT:   Analytic      LOC: Unemployment and inflation        TOP: Deflation
    MSC:   Interpretive
17. ANS:   B             PTS: 1                   DIF: 1        REF: 30-0
    NAT:   Analytic      LOC: Unemployment and inflation        TOP: Deflation
    MSC:   Interpretive
18. ANS:   B             PTS: 1                   DIF: 1        REF: 30-1
    NAT:   Analytic      LOC: The role of money                 TOP: Money market | Money demand
    MSC:   Applicative
19. ANS:   B             PTS: 1                   DIF: 2        REF: 30-1
    NAT:   Analytic      LOC: The role of money                 TOP: Money demand
    MSC:   Definitional
20. ANS:   B             PTS: 1                   DIF: 2        REF: 30-1
    NAT:   Analytic      LOC: Monetary and fiscal policy        TOP: Money market equilibrium
    MSC:   Applicative
21. ANS:   D             PTS: 1                   DIF: 2        REF: 30-1
    NAT:   Analytic      LOC: The role of money                 TOP: Money demand
    MSC:   Applicative
22. ANS:   B             PTS: 1                   DIF: 1        REF: 30-1
    NAT:   Analytic      LOC: The role of money                 TOP: Nominal variables | Real variables
    MSC:   Definitional
23. ANS:   B             PTS: 1                   DIF: 1        REF: 30-1
    NAT:   Analytic      LOC: The role of money                 TOP: Classical dichotomy
    MSC:   Definitional
24. ANS:   A             PTS: 1                   DIF: 1        REF: 30-1
    NAT:   Analytic      LOC: The role of money
    TOP:   Hyperinflation | Quantity theory of money            MSC: Definitional
25. ANS:   D             PTS: 1                   DIF: 1        REF: 30-1
    NAT:   Analytic      LOC: Unemployment and inflation        TOP: Hyperinflation | Inflation tax
    MSC:   Interpretive
26. ANS:   D             PTS: 1                   DIF: 1        REF: 30-1
    NAT:   Analytic      LOC: The role of money
    TOP:   Nominal interest rate | Real interest rate           MSC: Applicative
27. ANS:   D             PTS: 1                   DIF: 1        REF: 30-2
    NAT:   Analytic      LOC: The role of money                 TOP: Menu costs of inflation
    MSC:   Definitional
28. ANS:   A             PTS: 1                   DIF: 1        REF: 31-1
    NAT:   Analytic      LOC: International trade and finance   TOP: Net exports | Trade balance
    MSC:   Interpretive
29. ANS:   C             PTS: 1                   DIF: 1        REF: 31-1
    NAT:   Analytic      LOC: International trade and finance   TOP: Net exports
    MSC:   Applicative
30. ANS:   D             PTS: 1                   DIF: 2        REF: 31-1
    NAT:   Analytic      LOC: International trade and finance   TOP: Exports
    MSC:   Applicative
31. ANS:   D             PTS: 1                   DIF: 1        REF: 31-1
      NAT:   Analytic       LOC: International trade and finance       TOP:   Net capital outflow
      MSC:   Interpretive
32.   ANS:   B              PTS: 1                   DIF: 3            REF:   31-1
      NAT:   Analytic       LOC: International trade and finance       TOP:   National accounts
      MSC:   Analytical
33.   ANS:   B              PTS: 1                   DIF: 3            REF:   31-3
      NAT:   Analytic       LOC: International trade and finance       TOP:   Real exchange rate
      MSC:   Analytical
34.   ANS:   B              PTS: 1                   DIF: 1            REF:   32-1
      NAT:   Analytic       LOC: International trade and finance
      TOP:   Supply of loanable funds | Demand for loanable funds      MSC:   Applicative
35.   ANS:   C              PTS: 1                   DIF: 1            REF:   32-1
      NAT:   Analytic       LOC: International trade and finance
      TOP:   Demand for loanable funds | Net capital outflow           MSC:   Applicative
36.   ANS:   A              PTS: 1                   DIF: 2            REF:   32-1
      NAT:   Analytic       LOC: International trade and finance       TOP:   Real exchange rate | Net exports
      MSC:   Analytical
37.   ANS:   C              PTS: 1                   DIF: 2            REF:   32-2
      NAT:   Analytic       LOC: International trade and finance
      TOP:   Open-economy macroeconomic model                          MSC:   Analytical
38.   ANS:   C              PTS: 1                   DIF: 2            REF:   32-3
      NAT:   Analytic       LOC: International trade and finance
      TOP:   Budget deficits | Exchange rate | Net exports             MSC:   Analytical
39.   ANS:   C              PTS: 1                   DIF: 2            REF:   32-3
      NAT:   Analytic       LOC: International trade and finance
      TOP:   Budget deficits | Market for foreign-currency exchange    MSC:   Analytical
40.   ANS:   B              PTS: 1                   DIF: 2            REF:   32-3
      NAT:   Analytic       LOC: International trade and finance
      TOP:   Budget deficits | Interest rates | Net exports            MSC:   Analytical
41.   ANS:   A              PTS: 1                   DIF: 1            REF:   33-0
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate demand and supply model                         MSC:   Interpretive
42.   ANS:   D              PTS: 1                   DIF: 2            REF:   33-1
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Economic fluctuations | Investment                        MSC:   Interpretive
43.   ANS:   D              PTS: 1                   DIF: 1            REF:    33-1
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Unemployment and the business cycle                       MSC:   Applicative
44.   ANS:   B              PTS: 1                   DIF: 1            REF:   33-3
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate demand and supply slopes                        MSC:   Definitional
45.   ANS:   D              PTS: 1                   DIF: 2            REF:   33-3
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate demand                        MSC: Interpretive
46.   ANS:   B              PTS: 1                   DIF: 3            REF:   33-3
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate demand slope                  MSC: Definitional
47.   ANS:   A              PTS: 1                   DIF: 1            REF:   33-3
      NAT:   Analytic       LOC: Aggregate demand and aggregate supply
      TOP:   Exchange-rate effect | Interest-rate effect | Exchange-rate effect
      MSC:   Definitional
48.   ANS:   D               PTS: 1                 DIF: 2                 REF:   33-4
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Sticky-wage theory                     MSC: Definitional
49.   ANS:   A               PTS: 1                 DIF: 1                 REF:   33-5
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   2008 tax rebate                        MSC: Definitional
50.   ANS:   A               PTS: 1                 DIF: 1                 REF:   33-5
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate supply shifts | Oil prices                          MSC:   Applicative
51.   ANS:   B               PTS: 1                 DIF: 1                 REF:   34-2
      NAT:   Analytic        LOC: Monetary and fiscal policy
      TOP:   Fiscal policy | Aggregate demand shifts                       MSC:   Applicative
52.   ANS:   A               PTS: 1                 DIF: 2                 REF:   34-3
      NAT:   Analytic        LOC: Monetary and fiscal policy               TOP:   Stabilization policy
      MSC:   Applicative
53.   ANS:   C               PTS: 1                 DIF: 2                 REF:   33-2
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Classical theory                       MSC: Interpretive
54.   ANS:   C               PTS: 1                 DIF: 1                 REF:   33-2
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate demand and aggregate supply model                   MSC:   Definitional
55.   ANS:   B               PTS: 1                 DIF: 2                 REF:   33-3
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Interest-rate effect                   MSC: Analytical
56.   ANS:   B               PTS: 1                 DIF: 2                 REF:   33-3
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Exchange-rate effect                   MSC: Analytical
57.   ANS:   A               PTS: 1                 DIF: 2                 REF:   33-3
      NAT:   Analytic        LOC: Monetary and fiscal policy
      TOP:   Aggregate demand shifts | Fiscal policy                       MSC:   Applicative
58.   ANS:   C               PTS: 1                 DIF: 2                 REF:   33-4
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Long-run aggregate supply shifts       MSC: Applicative
59.   ANS:   D               PTS: 1                 DIF: 1                 REF:   33-4
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Short-run aggregate supply slope       MSC: Definitional
60.   ANS:   C               PTS: 1                 DIF: 2                 REF:   33-5
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Aggregate demand and aggregate supply model                   MSC:   Applicative
61.   ANS:   C               PTS: 1                 DIF: 2                 REF:   33-5
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Long-run equilibrium                   MSC: Analytical
62.   ANS:   D               PTS: 1                 DIF: 2                 REF:   33-5
      NAT:   Analytic        LOC: Aggregate demand and aggregate supply
      TOP:   Long-run equilibrium                   MSC: Analytical
63.   ANS:   D               PTS: 1                 DIF: 1                 REF:   34-1
      NAT:   Analytic        LOC: Monetary and fiscal policy               TOP:   Aggregate demand slope
    MSC:   Interpretive
64. ANS:   D               PTS: 1              DIF: 2         REF: 34-1
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Interest-rate effect
    MSC:   Analytical
65. ANS:   C               PTS: 1              DIF: 3         REF: 34-1
    NAT:   Analytic        LOC: Monetary and fiscal policy
    TOP:   Open-market operations | Aggregate demand shifts   MSC: Analytical
66. ANS:   B               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Multiplier
    MSC:   Applicative
67. ANS:   B               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Multiplier
    MSC:   Applicative
68. ANS:   C               PTS: 1              DIF: 3         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Crowding out
    MSC:   Applicative
69. ANS:   A               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Crowding out | Stabilization policy
    MSC:   Applicative
70. ANS:   A               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Multiplier
    MSC:   Applicative
71. ANS:   B               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Multiplier
    MSC:   Applicative
72. ANS:   C               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Multiplier | Crowding out
    MSC:   Analytical
73. ANS:   D               PTS: 1              DIF: 2         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy
    TOP:   Crowding out | Investment accelerator              MSC: Interpretive
74. ANS:   B               PTS: 1              DIF: 1         REF: 34-2
    NAT:   Analytic        LOC: Monetary and fiscal policy
    TOP:   Fiscal policy | Aggregate demand shifts            MSC: Applicative
75. ANS:   B               PTS: 1              DIF: 1         REF: 34-3
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Keynes
    MSC:   Definitional
76. ANS:   B               PTS: 1              DIF: 2         REF: 34-3
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Stabilization policy
    MSC:   Applicative
77. ANS:   A               PTS: 1              DIF: 1         REF: 34-3
    NAT:   Analytic        LOC: Monetary and fiscal policy    TOP: Stabilization policy
    MSC:   Applicative

				
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