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Multiple Choice



This activity contains 12 questions.

Question 1.
An increase in the expected price level (Pe) will cause:


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Question 2.
If output equals the natural rate of output then:


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Question 3.
If nothing else changes an increase in the price level will shift the LM curve:


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Question 4.
Suppose that equilibrium output initially equals the natural rate. The central bank begins an expansionary monetary policy. At the new medium-run equilibrium, this policy __________ output and __________ prices in the long run.


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Question 5.
Why does an aggregate demand curve slope downward?


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Question 6.
According to a 1993 study by Stanford economist John Taylor, the maximum impact on output of a change in the money supply occurs after:


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Question 7.
An increase in the saving rate (the marginal propensity to save) will probably:


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Question 8.
Stagflation is:


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Question 9.
In the short run, expansionary fiscal policy


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Question 10.
In the short run, contractionary monetary policy


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Question 11.
In the medium run, expansionary fiscal policy


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Question 12.
Fluctuations in output that occur over time are called:


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