Question :
111.Using Figure 14.1, ceteris paribus, if the Federal Reserve increases : 1232972
111.Using Figure 14.1, ceteris paribus, if the Federal Reserve increases the discount rate, this indicates a desire to _______ the money supply and will cause a shift from ______.
A. Expand; AD1 to AD2
B. Expand; AS1 to AS2
C. Contract; AD2 to AD1
D. Contract; AS3 to AS2
112.Refer to Figure 14.1. Ceteris paribus, which of the following Fed actions will shift the aggregate demand curve from AD1 to AD2?
A. An increase in the discount rate.
B. A decrease in the reserve requirement.
C. The sale of bonds in the open market by the Fed.
D. A decrease in the money multiplier.
113.Refer to Figure 14.1. Suppose the Federal Reserve buys bonds in the open market. The money supply will _______ and cause a shift from ______.
A. Increase; AD1 to AD2
B. Increase; AS1 to AS2
C. Decrease; AD2 to AD1
D. Decrease; AS3 to AS2
114.Refer to Figure 14.1. Suppose the Federal Reserve _______ bonds in the open market. The money supply will decrease and cause a shift from ______.
A. Buys; AD1 to AD2
B. Buys; AS2 to AS3
C. Sells; AD2 to AD1
D. Sells; AS2 to AS3
115.Using Figure 14.2, a shift in aggregate demand from AD1 to AD2 will cause, ceteris paribus:
A. An increase in real output and an increase in the price level.
B. An increase in real output, but no change in the price level.
C. An increase in price level, but no change in real output.
D. A decrease in the price level, but no change in real output.
116.Using Figure 14.2, a shift in aggregate demand from AD3 to AD4 will cause, ceteris paribus:
A. An increase in real output and an increase in the price level.
B. An increase in real output, but no change in the price level.
C. An increase in the price level, but no change in real output.
D. A decrease in the price level, but no change in real output.
117.Using Figure 14.2, a shift in aggregate demand from AD4 to AD5 will cause, ceteris paribus:
A. An increase in real output and an increase in the price level.
B. An increase in real output but no change in the price level.
C. An increase in the price level but no change in real output.
D. A decrease in the price level but no change in real output.
118.One News Wire article in the text is titled “Fed Cuts Key Interest Rate Half-Point to 1 Percent.” Which of the following is the Fed trying to accomplish as a result of this action?
A. A leftward shift of aggregate demand.
B. A rightward shift of aggregate demand.
C. A leftward shift of aggregate supply.
D. A rightward shift of aggregate supply.
119.One News Wire article in the text has the title “Fed Cuts Key Interest Rate Half-Point to 1 Percent.” Assuming the economy is in the upward sloping portion of the eclectic aggregate supply curve, what should happen to the price level and output as a result of the Fed’s action, ceteris paribus?
A. The equilibrium price level and equilibrium output should both increase.
B. The equilibrium price level should increase and equilibrium output should decrease.
C. The equilibrium price level should decrease and equilibrium output should increase.
D. The equilibrium price level and equilibrium output should both decrease.
120.One News Wire article in the text has the title “Fed Cuts Key Interest Rate Half-Point to 1 Percent.” The Fed has most likely reduced the:
A. Discount rate.
B. Rate for purchasing bonds in the open market.
C. Prime lending rate.
D. Rate for foreign exchange.
