宏观经济 习题34-36.doc

Chapter 34/The Influence of Monetary and Fiscal Policy on Aggregate Demand v 1401Chapter 34The Influence of Monetary and Fiscal Policy on Aggregate DemandMultiple Choice1.Fiscal policy affects the economya.only in the short run.b.only in the long run.c.in both the short and long run.d.in neither the short nor long run.2.Which of the following is not a reason the aggregate demand curve slopes downward? As the price level increasesa.firms may believe the relative price of their output has risen.b.real wealth declines.c.the interest rate increases.d.the exchange rate increases.3.For the U.S. economy, which of the following is the most important reason for the downward slope of the aggregate-demand curve?a.the wealth effectb.the interest-rate effectc.the exchange-rate effectd.the real-wage effect4.Liquidity preference refers directly to Keynes theory concerninga.the effects of changes in money demand and supply on interest rates.b.the effects of changes in money demand and supply on exchange rates.c.the effects of wealth on expenditures.d.the difference between temporary and permanent changes in income.5.According to the theory of liquidity preference, the money supplya.and money demand are positively related to the interest rate.b.and money demand are negatively related to the interest rate.c.is negatively related to the interest rate while money demand is positively related to the interest rate.d.is independent of the interest rate, while money demand is negatively related to the interest rate.6.According to liquidity preference theory, the opportunity cost of holding money isa.the interest rate on bonds.b.the inflation rate.c.the cost of converting bonds to a medium of exchange.d.the difference between the inflation rate and the interest rate on bonds.7.In the short run, an increase in the money supply causes interest rates toa.increase, and aggregate demand to shift right.b.increase, and aggregate demand to shift left.c.decrease, and aggregate demand to shift right.d.decrease, and aggregate demand to shift left.8.If the Fed conducts open-market sales, the money supplya.increases and aggregate demand shifts right.b.increases and aggregate demand shifts left.c.decreases and aggregate demand shifts right.d.decreases and aggregate demand shifts left.9.If the stock market booms,a.aggregate demand increases, which the Fed could offset by increasing the money supply.b.aggregate supply increases, which the Fed could offset by increasing the money supply.c.aggregate demand increases, which the Fed could offset by decreasing the money supply.d.aggregate supply increases, which the Fed could offset by decreasing the money supply.10.Fiscal policy refers to the idea that aggregate demand is changed by changes ina.the money ernment spending and taxes.c.trade policy.d.All of the above are correct.11.Which of the following tends to make aggregate demand shift right farther than the amount government expenditures increase?a.the crowding-out effectb.the multiplier effectc.the wealth effectd.the interest-rate effect12.The government-purchases multiplier is defined asa.MPC.b.1 - MPC.c.1/MPC.d.1/(1 - MPC).13.The change in aggregate demand that results from fiscal expansion changing the interest rate is called thea.multiplier effect.b.crowding-out effect.c.accelerator effect.d.Riccardian equivalence effect.15.Tax cutsa.and increases in government expenditures shift aggregate demand right.b.and increases in government expenditures shift aggregate demand left.c.shift aggregate demand right while increases in government expenditures shift aggregate demand left.d.shift aggregate demand left while increases in government expenditures shift aggregate demand right.16.If households view a tax cut as temporary, the tax cuta.has no affect on aggregate demand.b.has more of an affect on aggregate demand than if households view it as permanent.c.has the same affect as when households view the cut as permanent.d.has less of an affect on aggregate demand than if households view it as permanent.17.Supply-side economists focus more than other economists ona.how fiscal policy affects consumption.b.the multiplier affect of fiscal policy.c.how fiscal policy affects aggregate supply.d.the money supply.18.Monetary policya.can be implemented quickly and most of its impact on aggregate demand occurs very soon after policy is implemented.b.can be implemented quickly, but most of its impact on aggregate demand occurs months after policy is implemented.c.cannot be implemented quickly, but once implemented most of its impact on aggregate demand occurs very soon after policy is implemented.d.cannot be implemented quickly and most of its impact on aggregate demand occurs months after policy is implemented.19.Automatic stabilizersa.increase the problems that lags cause in using fiscal policy as a stabilization tool.b.are changes in taxes or government spending that increase aggregate demand without requiring policy makers to act when the economy goes into recession.c.are changes in taxes or government spending that policy makers quickly agree to when the economy goes into recession.d.All of the above are correct.True/False1.For the most part, fiscal policy affects the economy in the short run while monetary policy primarily matters in the long run.2.For the United States, the most important reason for the downward slope of the aggregate demand curve is the interest-rate effect.3.If the inflation rate is zero, then the nominal and real interest rate are the same.4.In liquidity preference theory, an increase in the interest rate, other things the same, decreases the quantity of money demanded, but does not shift the money demand curve.5.An increase in the price level shifts the money demand curve to the left making interest rates rise.6.An increase in the money supply shifts the aggregate supply curve right.7.When the Fed increases the money supply, the interest rate decreases. This decrease in the interest rate increases consumption and investment demand so the aggregate demand curve shifts to the right.8.Stock prices often rise when the Fed raises interest rates.9.Both the multiplier and the investment accelerator tend to make the aggregate demand curve shift farther than the initial increase in government expenditures.10.The multiplier is computed as MPC/(1 - MPC).11.Permanent tax cuts have a larger impact on consumption spending than temporary ones.12.In principle the government could increase the money supply or government expenditures to try to offset the effects of a wave of pessimism about the future of the economy.13.The main criticism of those who doubt the ability of the government to respond in a useful way to the business cycle is that the theory by which money and government expenditures change output is flawed.14.A significant lag for monetary policy is the time it takes to for a change in the money supply to change the economy. A significant lag for fiscal policy is the time it takes to pass legislation authorizing it.15.Unemployment insurance and welfare programs work as automatic stabilizers.16.During recessions, the government tends to run a budget deficit.Chapter 35 The Short-Run Trade-off between Inflation and UnemploymentMultiple Choice1.There is aa.short-run tradeoff between inflation and unemployment.b.short-run tradeoff between the actual unemployment rate and the natural rate of unemployment.c.long-run tradeoff between inflation and unemployment.d.long-run tradeoff between the actual unemployment rate and the natural rate of unemployment.2. If policymakers increase aggregate demand, the price levela.falls, but unemployment rises.b.and unemployment fall.c.and unemployment rise.d.rises, but unemployment falls3.If the government raises government expenditures, in the short run, pricesa.rise and unemployment falls.b.fall and unemployment rises.c.and unemployment rise.d.and unemployment fall.4.If policymakers expand aggregate demand, then in the long runa.prices will be higher and unemployment will be lower.b.prices will be higher and unemployment will be unchanged.c.prices and unemployment will be unchanged.d.None of the above is correct.5.Friedman and Phelps argueda.that in the long run, monetary growth did not influence those factors that determine the economys unemployment rate.b.that the Phillips curve could be exploited in the long run by using monetary, but not fiscal policy.c.that the short-run Phillips curve was very steep, but not vertical.d.that there was neither a short-run nor long-run tradeoff between inflation and unemployment.6.The natural rate of unemploymenta.is constant over time.b.varies over time, but cant be changed by the government.c.is the unemployment rate that the economy tends to move to in the long run.d.depends on the rate at which the Fed increases the money supply.7.A change in expected inflation shiftsa.the short-run Phillips curve, but not the long run Phillips curve.b.the long-run Phillips curve, but not the long run Phillips curve.c.neither the short-run nor the long-run Phillips curve.d.both the short-run and long-run Phillips curve right.8.The analysis of Friedman and Phelps can be summarized in the following equation where a is positive number:a.Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation).b.Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation).c.Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation).d.Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment).9.According to Friedman and Phelps, the unemployment rate a.depends on neither actual or expected inflation.b.is below its natural rate when actual inflation is greater than expected inflation.c.is below its natural rate when actual inflation is less than expected inflation.d.is below its natural rate when actual inflation equals expected inflation.10.If the government reduced the minimum wage and pursued contractionary monetary policy, then in the long runa.both the unemployment rate and the inflation rate would be lower.b.the unemployment rate would be lower and the inflation rate would be higher.c.the unemployment rate would be higher and the inflation rate would be lower.d.the unemployment rate and the inflation rate would be higher.11.Which of the following is correct if there is an adverse supply shock?a.The short-run aggregate supply curve and the short-run Phillips curve both shift right.b.The short-run aggregate supply curve and the short-run Phillips curve both shift left.c.The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left.d.The short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right.12.The sacrifice ratio is thea.sum of the inflation and unemployment rates.b.inflation rate divided by the unemployment rate.c.number of percentage points annual output falls for each percentage point reduction in inflation.d.number of percentage points unemployment rises for each percentage point reduction in inflation.13 .Which of the following is disinflation?a.prices stay the same.b.prices fall.c.prices rise at a slower rate than they used to.d.prices rise as a faster rate than they used to.14.Proponents of rational expectations argued that the sacrifice ratioa.could be high because it was rational for people not to immediately change their expectations.b.could be high because people might adjust their expectations quickly if they found anti-inflation policy credible.c.could be low because it was rational for people not to immediately change their expectations.d.could be low because people might adjust their expectations quickly if they found anti-inflation policy credible.True/False1.In the long run, the natural rate of unemployment depends primarily on the growth rate of the money supply.2.In the long run, the inflation rate depends primarily on money supply growth.3.If macroeconomic policy expands aggregate demand, unemployment will fall and inflation will rise in the short run.4.The logic behind the tradeoff between inflation and unemployment is that high aggregate demand puts upward pressure on wages and prices while raising output.5.Short-run outcomes in the economy can be expressed in terms of output and the price level, or in terms of unemployment and inflation.6.Fiscal policy cannot be used to move the economy along the short-run Phillips curve.7.If the Fed were to increase the money supply, inflation and unemployment would both increase in the short run.8.The vertical long-run Phillips curve is inconsistent with monetary neutrality implied by the classical dichotomy.9.Friedman and Phelps believed that the natural rate of unemployment was constant.10.Although monetary policy cannot reduce the natural rate of unemployment, other types of policies can.11.A policy change that reduced the natural rate of unemployment would shift both the long-run aggregate-supply curve and the long-run Phillips curve left.12.In the long run, people come to expect whatever inflation rate the Fed chooses to produce, so unemployment returns to its natural rate.13.The analysis of Friedman and Phelps argues that any change in inflation that is expected has no impact on the unemployment rate.14.In the Friedman-Phelps analysis, when inflation is less than expected, unemployment is greater than the natural rate.15.According to the Friedman-Phelps analysis, in the long run, actual inflation equals expected inflation, and unemployment is at its natural rate.16.An increase in inflation expectations shifts the short-run Phillips curve right and has no effect on the long-run Phillips curve.17.An adverse supply shock shifts the short-run Phillips curve right and the short-run aggregate-supply curve left.18.In most of the 1970s, the Feds policy created expectations of high inflation.19.A decrease in the growth rate of the money supply eventually causes the short-run Phillips curve to shift right.20.The sacrifice ratio is the percentage point increase in the unemployment rate created in the process of reducing inflation by one percentage point.21.Proponents of rational expectations argue that failing to account for peoples revised expectations led to estimates of the sacrifice ratio that were too high.Chapter 36Five Debates Over Macroeconomic PolicyMultiple Choice1.Leaning against the wind is exemplified by aa.tax cut when there is a recession.b.decrease in the money supply when there is a recession.c.decrease in government expenditures when there is a recession.d.All of the above are correct.2.If the unemployment rate rises, which policies would be appropriate to reduce it?a.increase the money supply, increase taxesb.increase the money supply, cut taxesc.decrease the money supply, increase taxesd.decrease the money supply, cut taxes3.Opponents of using policy to stabilize the economy generally believe thata.neither fiscal nor monetary policy have much impact on aggregate demand.b.attempts to stabilize the economy can increase the magnitude of economic fluctuations.c.unemployment and inflation are not cause for much concern.d.All of the above are correct.4 .Monetary policymakers are alloweda.almost no discretion and so there is no political business cycle.b.a lot of discretion which makes it unlikely that there is a political business cycle.c.almost no discretion so there is no political business cycle.d.a lot of discretion which makes it possible to have a political business cycle.5.The time inconsistency of monetary policy means thata.once people have formed expectations of low inflation based on a promise by the central bank, the central bank is tempted to raise inflation to lower unemployment.b.at some times central banks think it is more important to keep unemployment low; at other times, they think it is more important to keep inflation low.c.monetary policy is not consistent across time because it is influenced by politics.d.monetary policy is not consistent across time because policymakers are incompetent.6 .A law that requires the money supply to grow by a fixed percentage each year would eliminatea.the time inconsistency problem, but not political business cycles.b.the political business cycle, but not the time inconsistency problem.c.both the time inconsistency problem and political business cycles.d.neither the time inconsistency problem nor political business cycles.7.Proponents of zero inflation argue that reducing inflation hasa.permanent costs and temporary benefits.b.temporary costs and permanent benefits.c.permanent costs and benefits.d.temporary costs and benefits.8.Part of the argument against deficits is that theya.increase interest rates and investment.b.increase interest rates and decrease investment.c.decrease interest rates and investment.d.decrease interest rates and increase investment.9.Which of the following is not an argument against reforming the tax laws to encourage saving?a.A public budget surplus can raise national saving.b.The substitution effect of a higher return to saving may be about equal to the income effect of a higher r