ECO 316 Week 4 DQ 2 Fed Impact on the Dollar

 This pack of ECO 316 Week 4 Chapter 24 Linking the Financial System and the Economy The IS-LM-FE Model contains:


 24.1 Multiple Choice Questions

 1) Why did the Fed cut interest rates in late 1991?

 2) Why did the Fed cut interest rates in late 1998?

 3) A general equilibrium is an outcome in which

 4) The money market includes trade in

 5) Purchases and sales of stocks, bonds, and houses take place

 6) In macroeconomic models, Y typically represents

 7) In macroeconomic models, Y stands for

 8) An increase in the expected profitability of investment will cause

 9) A closed economy is one in which

 10) In a closed economy, the total quantity of goods demanded equals the sum of

 11) In a closed economy, the goods market is in equilibrium when

 12) In a closed economy, if the goods market is in equilibrium, national saving is $2 trillion, national consumption is $7 trillion, and government purchases are $2.5 trillion, then GDP equals

 13) In a closed economy, national saving equals

 14) For the goods market to be in equilibrium in a closed economy, which of the following must be true?

 15) Which of the following is NOT a key factor in determining household saving?

 16) An increase in the expected real interest rate will have a

 17) An increase in government purchases reduces national saving as long as

 18) Evidence suggests that when government purchases rise

 19) An increase in the real interest rate will

 20) In the saving-investment diagram, an increase in output will lead to

 21) In the savings-investment diagram, we know that an increase in the real interest rate raises the level of saving because

 22) The IS curve depicts the relationship between

 23) In a move down the IS curve,

 24) In a move up the IS curve,

 25) At points not on the IS curve,

 26) At a point above the IS curve,

 27) At a point below the IS curve,

 28) At a point below the IS curve,

 29) In an open economy,

 30) In a large open economy,

 31) In comparison with a closed economy, in a large open economy

 32) In a large open economy, the real interest rate does not have to fall by as much in order to restore equilibrium in the goods market in response to an increase in domestic output because

 33) Studies have shown that the degree of international mobility of savings among the United States, Japan, and many European countries

 34) The IS curve for a small open economy is

 35) With respect to the IS curve for a small open economy

 36) Which of the following would NOT cause a shift in the IS curve?

 37) Which of the following would NOT cause the IS curve to shift to the left?

 38) The level of full employment output

 39) During the first Gulf War

 40) The intersection of the IS curve and the FE line

 41) The FE line would be shifted to the right by

 42) Full-employment output can increase for all of the following reasons EXCEPT

 43) An unexpected decrease in oil prices would

 44) Which of the following equations correctly describes equilibrium in the two asset markets?

 45) If the demand for nonmoney assets exceeds the supply of nonmoney assets, the demand for money

 46) If the money market is in equilibrium

 47) A change in the inflation rate will

 48) Which of the following is the correct expression for the nominal market interest rate?

 49) A decline in real output causes the demand for real balances

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