Submissions

Here are your latest answers:

Question 1
If planned investment decreases as the interest rate increases, the absolute value of
the tax multiplier will be
Response: smaller than the absolute value of the tax multiplier that would result if
planned investment were independent of the interest rate.
Correct answer: smaller than the absolute value of the tax multiplier that would result if
planned investment were independent of the interest rate.
Score: 1 out of 1 Yes

Question 2
If the BSP unexpectedly shifts to a more expansionary monetary policy, which of the
following will most likely occur in the short run?
Response: an increase in unemployment
Correct answer: a decrease in the real interest rate
Score: 0 out of 1 No

Question 3
A policy mix of an expansionary fiscal policy and a contractionary monetary policy
would cause
Response: output to either increase, decrease, or remain unchanged and interest rates
to increase.
Correct answer: output to either increase, decrease, or remain unchanged and interest
rates to increase.
Score: 1 out of 1 Yes

Question 4
Monetary policy can be effective only if
Response: planned investment reacts to changes in the interest rate.
Correct answer: planned investment reacts to changes in the interest rate.
Score: 1 out of 1 Yes

Question 5
The interest rate is determined in the
Response: money market and influences the level of planned investment and thus the
goods market.
Correct answer: money market and influences the level of planned investment and thus
the goods market.
Score: 1 out of 1 Yes

Question 6
If GDP increases, there will initially be
Response: a shortage of money and the equilibrium interest rate will rise.
Correct answer: a shortage of money and the equilibrium interest rate will rise.
Score: 1 out of 1 Yes

Question 7
The severity of the crowding-out effect will be reduced if
Response: the BSP increases the money supply at the same time the federal
government increases government spending.
Correct answer: the BSP increases the money supply at the same time the federal
government increases government spending.
Score: 1 out of 1 Yes

Question 8
An intended goal of contractionary fiscal and monetary policy is
Response: an increase in interest rates.
Correct answer: a decrease in the level of aggregate output.
Score: 0 out of 1 No

Question 9
If the national government is reducing net taxes to stimulate the economy at the same
time the Fed is selling bonds in the open market, the effectiveness of the expansionary
fiscal policy will be
Response: increased, because the BSP's actions will result in higher interest rates.
Correct answer: reduced, because the BSP's actions will result in higher interest rates.
Score: 0 out of 1 No
Question 10
If firms sharply increase the number of investment projects undertaken when interest
rates fall and sharply reduce the number of investment projects undertaken when
interest rates increase, then, ignoring the crowding out effect,
A) B) C) D)
Response: expansionary monetary policy will be very effective.
Correct answer: expansionary monetary policy will be very effective.
Score: 1 out of 1 Yes

Question 11
The steeper the planned investment schedule (curve)
Response: the smaller is the crowding-out effect.
Correct answer: the smaller is the crowding-out effect.
Score: 1 out of 1 Yes

Question 12
A policy mix that consists of a contractionary fiscal policy and an expansionary
monetary policy would
Response: favor investment spending over government spending.
Correct answer: favor investment spending over government spending.
Score: 1 out of 1 Yes

Question 13
An unexpected increase in the supply of money will
Response: lead to a higher rate of unemployment in the short run.
Correct answer: reduce the real rate of interest and, thereby, trigger an increase in
current spending by households and businesses.
Score: 0 out of 1 No

Question 14
In an economy, when the price level falls, consumers and firms buy more goods and
services. This relationship is represented by the
Response: aggregate demand curve.
Correct answer: aggregate demand curve.
Score: 1 out of 1 Yes
Question 15
The policy mix that would cause the interest rate to decrease and investment to
increase, but have an indeterminate effect on aggregate output, is a mix of
Response: contractionary fiscal policy and expansionary monetary policy.
Correct answer: contractionary fiscal policy and expansionary monetary policy.
Score: 1 out of 1 Yes

Question 16
Which of the following actions is an example of an expansionary fiscal policy?
Response: a decrease in net taxes.
Correct answer: a decrease in net taxes.
Score: 1 out of 1 Yes

Question 17
Which of the following sequence of events follows an expansionary fiscal policy?
Response: AE↑ ⇒ Y↑ ⇒ Md↑ ⇒ r↑ ⇒ I↓ ⇒ AE↓.
Correct answer: AE↑ ⇒ Y↑ ⇒ Md↑ ⇒ r↑ ⇒ I↓ ⇒ AE↓.
Score: 1 out of 1 Yes

Question 18
If investment depends on the interest rate, a decrease in net taxes will cause aggregate
output to ________ than if investment doesn't depend on the interest rate.
Response: increase by less
Correct answer: increase by less
Score: 1 out of 1 Yes

Question 19
If the BSP lowered the reserve requirements imposed on the banking industry, which of
the following will most likely happen in the short run?
Response: an increase in the demand for loanable funds, which will exert upward
pressure on the interest rate
Correct answer: an increase in the supply of loanable funds, which will exert downward
pressure on the interest rate
Score: 0 out of 1 No
Question 20
An example of an expansionary monetary policy is
Response: a decrease in the required reserve ratio.
Correct answer: a decrease in the required reserve ratio.
Score: 1 out of 1 Yes

Question 21
) If the investment demand curve is vertical,
Response: monetary policy is ineffective, but fiscal policy is effective.
Correct answer: monetary policy is ineffective, but fiscal policy is effective.
Score: 1 out of 1 Yes

Question 22
If planned investment decreases as the interest rate increases, the size of the
government spending multiplier will be
Response: smaller than the government spending multiplier that would result if planned
investment were independent of the interest rate.
Correct answer: smaller than the government spending multiplier that would result if
planned investment were independent of the interest rate.
Score: 1 out of 1 Yes

Question 23
If the BSP wanted to institute a more expansionary monetary policy, which of the
following would it be most likely to do?
Response: increase government expenditures
Correct answer: buy government bonds from the public
Score: 0 out of 1 No

Question 24
Which of the following sequence of events occurs in response to an expansionary fiscal
policy?
Response: Aggregate output increases, causing money demand to increase, causing
interest rates to increase and planned investment to decrease.
Correct answer: Aggregate output increases, causing money demand to increase,
causing interest rates to increase and planned investment to decrease.
Score: 1 out of 1 Yes

Question 25
Which of the following is the sequence of events following a contractionary monetary
policy?
Response: Interest rates increase ⇒ planned investment decreases ⇒ aggregate output
decreases ⇒ money demand decreases.
Correct answer: Interest rates increase ⇒ planned investment decreases ⇒ aggregate
output decreases ⇒ money demand decreases.
Score: 1 out of 1 Yes

Question 26
If you are concerned that the inflation rate is too high, which of the following policies
would you recommend?
Response: a decrease in the money supply
Correct answer: a decrease in the money supply
Score: 1 out of 1 Yes

Question 27
The policy mix of a contractionary fiscal policy and a contractionary monetary policy
would cause output to ________, and interest rates to ________.
Response: decrease; increase, decrease, or remain unchanged
Correct answer: decrease; increase, decrease, or remain unchanged
Score: 1 out of 1 Yes

Question 28
In the short run, which of the following is the most likely effect of an unanticipated move
to expansionary monetary policy?
Response: an increase in real output
Correct answer: an increase in real output
Score: 1 out of 1 Yes

Question 29
Assume that investment spending depends on the interest rate. As the supply of money
is increased, the interest rate ________ and planned investment spending ________.
A) B) falls; decreases
 C) rises; decreases
D) rises; increases
Response: falls; increases
Correct answer: falls; increases
Score: 1 out of 1 Yes

Question 30
If the BSP accommodates a fiscal expansion by increasing the money supply so that
the interest rate increases only a little, the crowding-out effect will
Response: decrease, but still be positive.
Correct answer: decrease, but still be positive.
Score: 0 out of 1 No
Assessment
 Type: Quiz
 Max score: 30
 Start: May 12, 7:00 am
 Due: May 16

Score
Your latest submission is used
2.25

Category Progress

Grade 76.66666666666667

None 23.33333333333333
23/30 (77%)