Question : 111.Refer to Figure 16.1. If the economy initially in equilibrium : 1233002

111.Refer to Figure 16.1. If the economy is initially in equilibrium at P1 and Q2, the appropriate policy to move the economy to an equilibrium at P2 and Q3 would be to:   

A. Reduce immigration barriers.

B. Increase the marginal tax rate.

C. Increase government spending.

D. Increase interest rates.

112.Refer to Figure 16.1. A shift from AD1 to AD2 could be caused by:   

A. A decrease in government spending.

B. An increase in the money supply.

C. An increase in taxes.

D. An increase in the incentives to save.

113.In Figure 16.2, a shift from AS2 to AS3 is most likely to result from:   

A. An increase in government spending.

B. An increase in government regulation.

C. A decrease in the reserve requirement.

D. An increase in the investment in human capital.

114.Refer to Figure 16.2. The sale of bonds by the Fed in the open market will result in:   

A. A decrease in the money supply and a move from AD2 to AD1.

B. An increase in the money supply and a move from AD1 to AD2.

C. A decrease in the money supply and a move from AS2 to AS1.

D. An increase in the money supply and a move from AS1 to AS2.

115.Refer to Figure 16.2. Which of the following would most likely cause a shift from AD1 to AD2?   

A. A decrease in transfer payments.

B. An increase in government spending.

C. A decrease in the money supply through open market operations.

D. An increase in the marginal tax rate.

116.A cartoon in the text shows a man reading a newspaper. He says to another man “Which economist should we listen to today?” The cartoon depicts the concept that:   

A. Economists are not necessary because they don’t know what they are talking about.

B. Newspapers cannot accurately predict future economic situations.

C. Most economists approach macro failures with the same policy options.

D. Different macro theories provide different explanations and policy choices to address macro failures.

117.One News Wire article, titled “NBER Makes It Official: Recession Started in December 2007,” dated December 2008, explains that the National Bureau of Economic Research waited 12 months to announce that economic activity peaked in December of 2007. Which of the following obstacles does this article address?   

A. Measurement problems.

B. Goal conflicts.

C. Design problems.

D. Implementation problems.

118.One News Wire article, titled “NBER Makes It Official: Recession Started in December 2007,” dated December 2008, explains that the National Bureau of Economic Research waited 12 months to announce that economic activity peaked in December of 2007. This suggests that:   

A. There are important lags in response to policy.

B. The political business cycle is to blame for the economic situation.

C. Measurement difficulties prevent policy makers from identifying what is happening in the economy.

D. Economists could not agree on policy priorities.

119.The News Wire article titled “Tough Calls in Economic Forecasting” suggests that:   

A. It is difficult for models to predict economic outcomes.

B. Economists have accurately predicted most changes in the business cycle.

C. It is difficult to design economic policy to address different goals.

D. Economists typically agree on policy priorities.