51.Anincreaseingovernmentspending
a.increasestheinterestrateandsoinvestmentspendingincreases.
b.increasestheinterestrateandsoinvestmentspendingdecreases.
c.decreasestheinterestrateandsoincreasesinvestmentspendingincreases.
d.decreasestheinterestrateandsoinvestmentspendingdecreases.
52.Adecreaseingovernmentspending
a.increasestheinterestrateandsoinvestmentspendingincreases.
b.increasestheinterestrateandsodecreasesinvestmentspendingdecreases.
c.decreasestheinterestrateandsoinvestmentspendingincreases.
d.decreasestheinterestrateandsoinvestmentspendingdecreases.
53.Toreducetheeffectsofcrowdingoutcausedbyanincreaseingovernmentexpenditures,theFederalReservecould
a.increasethemoneysupplybybuyingbonds.
b.increasethemoneysupplybysellingbonds.
c.decreasethemoneysupplybybuyingbonds.
d.increasethemoneysupplybysellingbonds.
54.Sometimesduringwars,governmentexpendituresarelargerthannormal.Toreducetheeffectsthisspendingcreatesoninterestrates,
a.theFederalReservecouldincreasethemoneysupplybybuyingbonds.
b.theFederalReservecouldincreasethemoneysupplybysellingbonds.
c.theFederalReservecoulddecreasethemoneysupplybybuyingbonds.
d.theFederalReservecoulddecreasethemoneysupplybysellingbonds.
55.Supposetherearebothmultiplierandcrowdingouteffectsbutwithoutanyacceleratoreffects.Anincreaseingovernmentexpenditureswoulddefinitely
a.shiftaggregatedemandrightbyalargeramountthantheincreaseingovernmentexpenditures.
b.shiftaggregatedemandrightbythesameamountastheincreaseingovernmentexpenditures.
c.shiftaggregatedemandrightbyasmalleramountthantheincreaseingovernmentexpenditures.
d.Anyoftheaboveoutcomesarepossible.
56.Iftheinvestmentacceleratorfromanincreaseingovernmentpurchasesislargerthanthecrowding-outeffect,then
a.themultiplierisprobablyzero.
b.themultiplierisprobablyequaltoone.
c.themultiplierisprobablygreaterthanone.
d.themultiplierisprobablylessthanone.
57.Assumethereisamultipliereffect,somecrowdingout,andnoacceleratoreffect.Anincreaseingovernmentexpenditureschangesaggregatedemandmore,
a.thesmallertheMPCandthestrongertheinfluenceofincomeonmoneydemand.
b.thesmallertheMPCandtheweakertheinfluenceofincomeonmoneydemand.
c.thelargertheMPCandthestrongertheinfluenceofincomeonmoneydemand.
d.thelargertheMPCandtheweakertheinfluenceofincomeonmoneydemand.
58.Assumingnocrowding-out,investment-accelerator,ormultipliereffects,a$100billionincreaseingovernmentexpendituresshiftsaggregatedemand
a.rightbymorethan$100billion.
b.rightby$100billion.
c.leftby morethan $100 billion.
d.leftby$100billion.
59.Assumingamultipliereffect,butnocrowding-outorinvestment-acceleratoreffects,a$100billionincreaseingovernmentexpendituresshiftsaggregate
a.demandrightwardbymorethan$100billion.
b.demandrightwardbylessthan$100billion.
c.supplyleftwardbymorethan$100billion.
d.supplyleftwardbylessthan$100billion.
60.Ifnet exportsfall $40billion, theMPCis9/11,andthereisamultipliereffectbutnocrowdingoutandnoinvestmentaccelerator,then
a.aggregatedemandfallsby2x$40billion.
b.aggregatedemandfallsby11/2x$40billion.
c.aggregatedemandfallsby11/9x$40billion.
d.aggregatedemandfallsby9/11x$40billion.
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