中级宏观经济学付费版题库12总需求Ⅱ应用IS—LM模型.doc

Name: _ Date: _1.The interaction of the IS curve and the LM curve together determine:A)the price level and the inflation rate.B)the interest rate and the price level.C)investment and the money supply.D)the equilibrium level of the interest rate and output.Use the following to answer questions 2-4:Exhibit: ISLM Fiscal Policy2.(Exhibit: ISLM Fiscal Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, a decrease in government spending would generate the new equilibrium combination of interest rate and income:A)r2, Y2B)r3, Y2C)r2, Y3D)r3, Y33.(Exhibit: ISLM Fiscal Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, an increase in government spending would generate the new equilibrium combination of interest rate and income:A)r2, Y2B)r3, Y2C)r2, Y3D)r3, Y34.(Exhibit: ISLM Fiscal Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, a tax cut would generate the new equilibrium combination of interest rate and income:A)r2, Y2B)r3, Y2C)r2, Y3D)r3, Y35.In the ISLM model when government spending rises, in short-run equilibrium, in the usual case the interest rate _ and output _.A)rises; fallsB)rises; risesC)falls; risesD)falls; falls6.In the ISLM model, a decrease in government purchases leads to a(n) _ in planned expenditures, a(n) _ in total income, a(n) _ in money demand, and a(n) _ in the equilibrium interest rate.A)decrease; decrease; decrease; decreaseB)increase; increase; increase; increaseC)decrease; decrease; increase; increaseD)increase; increase; decrease; decrease7.In the ISLM model, the impact of an increase in government purchases in the goods market has ramifications in the money market, because the increase in income causes a(n) _ in money _.A)increase; supplyB)increase; demandC)decrease; supplyD)decrease; demand8.In the ISLM model when taxation increases, in short-run equilibrium, the interest rate _ and output _.A)rises; fallsB)rises; risesC)falls; risesD)falls; falls9.If the LM curve is vertical and government spending rises by G, in the ISLM analysis, then equilibrium income rises by:A)G/(1 MPC).B)more than zero but less than G/(1 MPC).C)G.D)zero.10.If MPC = 0.75 (and there are no income taxes) when G increases by 100, then the IS curve for any given interest rate shifts to the right by:A)100.B)200.C)300.D)400.11.If MPC = 0.75 (and there are no income taxes but only lump-sum taxes) when T decreases by 100, then the IS curve for any given interest rate shifts to the right by:A)100.B)200.C)300.D)400.12.In the ISLM model under the usual conditions in a closed economy, an increase in government spending increases the interest rate and crowds out:A)prices.B)investment.C)the money supply.D)taxes.13.The increase in income in response to a fiscal expansion in the ISLM is:A)always less than in the Keynesian-cross model.B)less than in the Keynesian-cross model unless the LM curve is vertical.C)less than in the Keynesian-cross model unless the LM curve is horizontal.D)less than in the Keynesian-cross model unless the IS curve is vertical.14.Using the ISLM analysis, if the LM curve is not horizontal, the multiplier for an increase in government spending is _ for an increase in government purchases using the Keynesian-cross analysis.A)larger than the multiplierB)the same as the multiplierC)smaller than the multiplierD)sometimes larger and sometimes smaller than the multiplier15.The reason that the income response to a fiscal expansion is generally less in the ISLM model than it is in the Keynesian-cross model is that the Keynesian-cross model assumes that:A)investment is not affected by the interest rate whereas in the ISLM model fiscal expansion raises the interest rate and crowds out investment.B)investment is not affected by the interest rate whereas in the ISLM model fiscal expansion lowers the interest rate and crowds out investment.C)investment is autonomous whereas in the ISLM model fiscal expansion encourages higher investment, which raises the interest rate.D)the price level is fixed whereas in the ISLM model it is allowed to vary.16.In the ISLM model, changes in taxes initially affect planned expenditures through:A)consumption.B)investment.C)government spending.D)the interest rate.17.In the ISLM analysis, the increase in income resulting from a tax cut is usually _ the increase in income resulting from an equal rise in government spending.A)less thanB)greater thanC)equal toD)sometimes less and sometimes greater thanUse the following to answer questions 18-19:Exhibit: ISLM Monetary Policy18.(Exhibit: ISLM Monetary Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, a decrease in the money supply would generate the new equilibrium combination of interest rate and income:A)r2, Y2B)r3, Y2C)r2, Y3D)r3, Y319.(Exhibit: ISLM Monetary Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, an increase in the money supply would generate the new equilibrium combination of interest rate and income:A)r2, Y2B)r3, Y2C)r2, Y3D)r3, Y320.If the money supply increases, then in the ISLM analysis the _ curve shifts to the _.A)LM; leftB)LM; rightC)IS; leftD)IS; right21.In the ISLM model when M/P rises, in short-run equilibrium, in the usual case the interest rate _ and output _.A)rises; fallsB)rises; risesC)falls; risesD)falls; falls22.In the ISLM model when M rises but P remains constant, in short-run equilibrium, in the usual case the interest rate _ and output _.A)rises; fallsB)rises; risesC)falls; risesD)falls; falls23.In the ISLM model when M remains constant but P rises, in short-run equilibrium, in the usual case the interest rate _ and output _.A)rises; fallsB)rises; risesC)falls; risesD)falls; falls24.If the demand for real money balances does not depend on the interest rate, then the LM curve:A)slopes up to the right.B)slopes down to the right.C)is horizontal.D)is vertical.25.In the ISLM model when the Federal Reserve decreases the money supply, people _ bonds and the interest rate _, leading to a(n) _ in investment and income.A)buy; rises; increaseB)sell; falls; decreaseC)sell; rises; decreaseD)buy; rises; decrease26.The monetary transmission mechanism works through the effects of changes in the money supply on:A)the budget deficit.B)investment.C)government expenditures.D)taxation.27.The monetary transmission mechanism in the ISLM model is a process whereby an increase in the money supply increases the demand for goods and services:A)directly.B)by lowering the interest rate so that investment spending increases.C)by raising the interest rate so that investment spending increases.D)by increasing government spending on goods and services.28.If Congress passed a tax increase at the request of the president to reduce the budget deficit, but the Fed held the money supply constant, then the two policies together would generally lead to _ income and a _ interest rate.A)lower; lowerB)lower; higherC)no change in; lowerD)no change in; higher29.According to the ISLM model, if Congress raises taxes but the Fed wants to hold the interest rate constant, then the Fed must _ the money supply.A)increaseB)decreaseC)first increase and then decreaseD)first decrease and then increase30.According to the ISLM model, if Congress raises taxes but the Fed wants to hold income constant, then the Fed must _ the money supply.A)increaseB)decreaseC)first increase and then decreaseD)first decrease and then increase31.If taxes are raised, but the Fed prevents income from falling by raising the money supply, then:A)both consumption and investment remain unchanged.B)consumption rises but investment falls.C)investment rises but consumption falls.D)both consumption and investment fall.Use the following to answer questions 32-34:Exhibit: Policy Interaction32.(Exhibit: Policy Interaction) Based on the graph, starting from equilibrium at interest rate r3, income Y2, IS1, and LM1, if there is an increase in government spending that shifts the IS curve to IS2, then in order to keep the interest rate constant, the Federal Reserve should _ the money supply shifting to _.A)increase; LM2B)decrease; LM2C)increase; LM3D)decrease; LM333.(Exhibit: Policy Interaction) Based on the graph, starting from equilibrium at interest rate r3, income Y2, IS1, and LM1, if there is an increase in government spending that shifts the IS curve to IS2, then in order to keep output constant, the Federal Reserve should _ the money supply shifting to _.A)increase; LM2B)decrease; LM2C)increase; LM3D)decrease; LM334.(Exhibit: Policy Interaction) Based on the graph, starting from equilibrium at interest rate r3, income Y2, IS1, and LM1, if there is an increase in government spending that shifts the IS curve to IS2 and the Federal Reserve does not change the money supply, the new equilibrium combination of interest and income will be _.A)r1, Y2B)r2, Y3C)r3, Y3D)r3, Y435.According to the macroeconometric model developed by Data Resources Incorporated, the response of GDP four quarters after an increase in government spending, with the nominal interest rate held constant, will be _ the response of GDP to a similar change with the money supply held constant.A)less than half as great asB)approximately equal toC)more than two times as great asD)more than three times as great as36.According to the macroeconometric model developed by Data Resources Incorporated, if taxes are increased by $100 billion, but the money supply is held constant, then GDP will fall by about:A)zero.B)$25 billion.C)$75 billion.D)$100 billion.37.An increase in investment demand for any given level of income and interest ratesdue, for example, to more optimistic “animal spirits”will, within the ISLM framework, _ output and _ interest rates.A)increase; lowerB)increase; raiseC)lower; lowerD)lower; raise38.An increase in consumer saving for any given level of income will shift the:A)LM curve upward and to the left.B)LM curve downward and to the right.C)IS curve downward and to the left.D)IS curve upward and to the right.39.An increase in the demand for money, at any given income level and level of interest rates, will, within the ISLM framework, _ output and _ interest rates.A)increase; lowerB)increase; raiseC)lower; lower.D)lower; raise40.In the ISLM model, a decrease in the interest rate would be the result of a(n):A)increase in the money supply.B)increase in government purchases.C)decrease in taxes.D)increase in money demand.41.In the ISLM model, a decrease in output would be the result of a(n):A)decrease in taxes.B)increase in the money supply.C)increase in money demand.D)increase in government purchases.42.The U.S. recession of 2001 can be explained in part by a declining stock market and terrorist attacks. Both of these shocks can be represented in the ISLM model by shifting the _ curve to the _.A)LM; rightB)LM; leftC)IS; rightD)IS; left43.One policy response to the U.S. economic slowdown of 2001 was tax cuts. This policy response can be represented in the ISLM model by shifting the _ curve to the _.A)LM; rightB)LM; leftC)IS; rightD)IS; left44.One policy response to the U.S. economic slowdown of 2001 was to increase money growth. This policy response can be represented in the ISLM model by shifting the _ curve to the _.A)LM; rightB)LM; leftC)IS; rightD)IS; left45.When bond traders for the Federal Reserve seek to increase interest rates, they _ bonds, which shifts the _ curve to the left.A)buy; ISB)buy; LMC)sell; ISD)sell; LM46.When bond traders for the Federal Reserve seek to decrease interest rates, they _ bonds, which shifts the _ curve to the right.A)buy; ISB)buy; LMC)sell; ISD)sell; LM47.The aggregate demand curve generally slopes downward and to the right because, for any given money supply M a higher price level P causes a _ real money supply M/P, which _ the interest rate and _ spending.A)lower; raises; reducesB)higher; lowers; increasesC)lower; lowers; increasesD)higher; raises; reduces48.An economic change that does not shift the aggregate demand curve is a change in:A)the money supply.B)the investment function.C)the price level.D)taxes.49.A change in income in the ISLM model for a fixed priceA)represents a shift in the aggregate demand curve.B)represents a movement along the aggregate demand curve.C)has the same effect on the aggregate demand curve as a change in income in the ISLM model resulting from a change in the price level.D)does not represent a change in the aggregate demand curve.50.An increase in the money supply shifts the _ curve to the right, and the aggregate demand curve _.A)IS; shifts to the rightB)IS; does not shiftC)LM: shifts to the rightD)LM; does not shift51.A tax cut shifts the _ to the right, and the aggregate demand curve _.A)IS; shifts to the rightB)IS; does not shiftC)LM: shifts to the rightD)LM; does not shift52.A decrease in the price level shifts the _ curve to the right, and the aggregate demand curve _.A)IS; shifts to the rightB)IS; does not shiftC)LM: shifts to the rightD)LM; does not shift53.A change in income in the ISLM model resulting from a change in the price level is represented by a _ aggregate demand curve, while a change in income in the ISLM model for a given price level is represented by a _ aggregate demand curve.A)movement along the; shift in theB)shift in the; movement along theC)vertical; horizontalD)horizontal; verticalUse the following to answer questions 54-56:Exhibit: ISLM to Aggregate Demand54.(Exhibit: ISLM to Aggregate Demand) Based on the graph, if LM1 shifts to LM2 because the price level decreases from P1 to P2 then, holding other factors constant:A)the aggregate demand curve will shift to the right.B)the aggregate demand curve will shift to the left.C)this represents a movement up the aggregate demand curve.D)this represents a movement down the aggregate demand curve.55.(Exhibit: ISLM to Aggregate Demand) Based on the graph, if LM3 shifts to LM2 because the money supply decreases from M3 to M2 then, holding other factors constant:A)the aggregate demand curve will shift to the right.B)the aggregate demand curve will shift to the left.C)this represents a movement up the aggregate demand curve.D)this represents a movement down the aggregate demand curve.56.(Exhibit: ISLM to Aggregate Demand) Based on the graph, which is the correct ordering of the price levels and money supplies?A)P1 P2 and M1 M2B)P1 P2 and M1 M2C)P1 M2D)P1 P2 and M1 M257.A movement along an aggregate demand curve corresponds to a change in income in the ISLM model _, while a shift in an aggregate demand curve corresponds to a change in income in the ISLM model _.A)resulting from a change in monetary policy; resulting from a change in fiscal policyB)resulting from a change in fiscal policy; resulting from a change in monetary policyC)at a given price level; resulting from a change in the price levelD)resulting from a change in the price level; at a given price level58.Starting from a short-run equilibrium greater than the natural rate of output, as the economy returns to a long-run equilibrium:A)both output and the price level will increase.B)output will decrease, but the price level will increase.C)output will increase, but the price level will decrease.D)both output and the price level will decrease.59.If the short-run ISLM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will _, shifting the _ curve to the right and returning output to the natural level.A)increase; ISB)decrease; ISC)increase; LMD)decrease; LM60.If the short-run ISLM equilibrium occurs at a level of income above the natural level of output, in the long run the _ will _ in order to return output to the natural level.A)price level; increaseB)interest rate; decreaseC)money supply; increaseD)consumption function; decreaseUse the following to answer questions 61-62:Exhibit: Short Run to Long Run61.(Exhibit: Short Run to Long Run) Based on the graph, if the economy starts from a short-term equilibrium at A, then the long-run equilibrium will be