Question 1

Which of these terms is the money multiplier?

Accepted Answer

A)  1/r 
B)  MV 
C)  Ms 
D)  Cp 
E)  none of the above 
A)  1/r 
B)  MV 
C)  Ms 
D)  Cp 
E)  none of the above

Question 2

The sum of cash in the hands of the public and the reserves of the banking system is known as:

Accepted Answer

A)  money multiplier 
B)  money supply 
C)  monetary base 
D)  aggregate supply 
E)  aggregate demand 
A)  money multiplier 
B)  money supply 
C)  monetary base 
D)  aggregate supply 
E)  aggregate demand

Question 3

If an unpopular military dictatorship in Latin America wanted to "buy" popularity then this could lead to G > T. How could this situation be linked to inflation?

Accepted Answer

If an unpopular military dictatorship in

Question 4

For a typical central bank in Latin America, the most important tool of monetary policy is:

Accepted Answer

A)  changing the reserve requirement. 
B)  changing the discount rate. 
C)  open market operations. 
D)  changing the margin requirement. 
E)  an election. 
A)  changing the reserve requirement. 
B)  changing the discount rate. 
C)  open market operations. 
D)  changing the margin requirement. 
E)  an election.

Question 5

Based on the equation of exchange, we can find this identity for the velocity of money:

Accepted Answer

A)  V = PQ/M 
B)  V = M/PQ 
C)  V = C + G + I + (X-M) 
D)  V = Cp + R 
E)  none of the above 
A)  V = PQ/M 
B)  V = M/PQ 
C)  V = C + G + I + (X-M) 
D)  V = Cp + R 
E)  none of the above

Question 6

When the central bank makes a loan to a private sector bank, the monetary base _____. When the loan is paid off, it _______.

Accepted Answer

A)  expands, expands 
B)  expands, contracts 
C)  contracts, contracts 
D)  contracts, expands 
E)  none of the above 
A)  expands, expands 
B)  expands, contracts 
C)  contracts, contracts 
D)  contracts, expands 
E)  none of the above

Question 7

The amount of final goods and services an economy is producing at full employment is known as:

Accepted Answer

A)  money multiplier 
B)  aggregate supply 
C)  money supply 
D)  monetary base 
E)  potential real GDP 
A)  money multiplier 
B)  aggregate supply 
C)  money supply 
D)  monetary base 
E)  potential real GDP

Question 8

During the 1980s, the average annual percentage change in the money supply was _____ percent.

Accepted Answer

A)  19.5 
B)  44.3 
C)  215.3 
D)  168 
E)  14.6 
A)  19.5 
B)  44.3 
C)  215.3 
D)  168 
E)  14.6

Question 9

For the 1980s, the budget deficits for Latin America ran around what percent of GDP?

Accepted Answer

A)  1% 
B)  4% 
C)  9% 
D)  15% 
E)  20% 
A)  1% 
B)  4% 
C)  9% 
D)  15% 
E)  20%

Question 10

In the long run, if AD increases faster than LRAS, then:

Accepted Answer

A)  P rises. 
B)  P falls. 
C)  Q falls. 
D)  both P and Q fall. 
E)  none of the above 
A)  P rises. 
B)  P falls. 
C)  Q falls. 
D)  both P and Q fall. 
E)  none of the above

Question 11

Illustrate the inflationary process using graphs.

Accepted Answer

The inflationary process can be illustra

Question 12

Which of the following would shift the SRAS curve?

Accepted Answer

A)  changes in the exchange rate 
B)  changes in the price of oil 
C)  changes in inflationary expectations 
D)  all of the above 
E)  none of the above 
A)  changes in the exchange rate 
B)  changes in the price of oil 
C)  changes in inflationary expectations 
D)  all of the above 
E)  none of the above

Question 13

An exchange rate shock causes P to _____ and Y to _____.

Accepted Answer

A)  increase, increase 
B)  decrease, stay the same 
C)  decrease, decrease 
D)  increase, stay the same 
E)  increase, decrease 
A)  increase, increase 
B)  decrease, stay the same 
C)  decrease, decrease 
D)  increase, stay the same 
E)  increase, decrease

Question 14

Describe how a fiscal deficit can end up leading to extremely high rates of inflation. Explain why central bank independence is crucial in preventing this from happening.

Accepted Answer

A fiscal deficit occurs when a governmen

Question 15

Explain the equation of exchange. Describe how changes in the money supply could have negative effects on the price level.

Accepted Answer

The equation of exchange is a fundamenta

Question 16

Increasing inflationary expectations can cause:

Accepted Answer

A)  a shirt in AD. 
B)  a shift in LRAS. 
C)  a shift in SRAS. 
D)  all of the above 
E)  none of the above 
A)  a shirt in AD. 
B)  a shift in LRAS. 
C)  a shift in SRAS. 
D)  all of the above 
E)  none of the above

Question 17

What is economic populism? Explain how economic populism can have negative long-term effects on an economy.

Accepted Answer

Economic populism is a political approac

Question 18

Show how short-run policies that reduce unemployment can lead to inflation in the long run.

Accepted Answer

Short-run policies that aim to reduce un

Question 19

Structuralist economics emphasizes that inflation is caused by:

Accepted Answer

A)  government budget deficits. 
B)  money supply growth. 
C)  aggregate supply. 
D)  inflationary expectations. 
E)  none of the above 
A)  government budget deficits. 
B)  money supply growth. 
C)  aggregate supply. 
D)  inflationary expectations. 
E)  none of the above

Question 20

Describe how a relatively small government budget deficit financed by printing money can lead to severe inflation.

Accepted Answer

When a government runs a budget deficit,

Which of these terms is the money multiplier?

The sum of cash in the hands of the public and the reserves of the banking system is known as:

If an unpopular military dictatorship in Latin America wanted to "buy" popularity then this could lead to G > T. How could this situation be linked to inflation?

For a typical central bank in Latin America, the most important tool of monetary policy is:

Based on the equation of exchange, we can find this identity for the velocity of money:

When the central bank makes a loan to a private sector bank, the monetary base _. When the loan is paid off, it ___.

The amount of final goods and services an economy is producing at full employment is known as:

During the 1980s, the average annual percentage change in the money supply was _____ percent.

For the 1980s, the budget deficits for Latin America ran around what percent of GDP?

In the long run, if AD increases faster than LRAS, then:

Illustrate the inflationary process using graphs.

Which of the following would shift the SRAS curve?

An exchange rate shock causes P to _ and Y to _.

Describe how a fiscal deficit can end up leading to extremely high rates of inflation. Explain why central bank independence is crucial in preventing this from happening.

Explain the equation of exchange. Describe how changes in the money supply could have negative effects on the price level.

Increasing inflationary expectations can cause:

What is economic populism? Explain how economic populism can have negative long-term effects on an economy.

Show how short-run policies that reduce unemployment can lead to inflation in the long run.

Structuralist economics emphasizes that inflation is caused by:

Describe how a relatively small government budget deficit financed by printing money can lead to severe inflation.

Latin American Economic History

Economic Growth and Latin America

Limits to Growth in Latin America

Growth and the Environment in Latin America

Latin American and Primary Commodities

Import Substitution in Latin America

Latin American Trade Policy

Exchange-Rate Policy

Financing Current-Account Deficits

Macroeconomic Stability

Poverty Inequality

Economic Policy Debates in Latin America

Filters

Exam 10: Macroeconomic Policy in Latin America

Which of these terms is the money multiplier?

The sum of cash in the hands of the public and the reserves of the banking system is known as:

If an unpopular military dictatorship in Latin America wanted to "buy" popularity then this could lead to G > T. How could this situation be linked to inflation?

For a typical central bank in Latin America, the most important tool of monetary policy is:

Based on the equation of exchange, we can find this identity for the velocity of money:

When the central bank makes a loan to a private sector bank, the monetary base _____. When the loan is paid off, it _______.

The amount of final goods and services an economy is producing at full employment is known as:

During the 1980s, the average annual percentage change in the money supply was _____ percent.

For the 1980s, the budget deficits for Latin America ran around what percent of GDP?

In the long run, if AD increases faster than LRAS, then:

Illustrate the inflationary process using graphs.

Which of the following would shift the SRAS curve?

An exchange rate shock causes P to _____ and Y to _____.

Describe how a fiscal deficit can end up leading to extremely high rates of inflation. Explain why central bank independence is crucial in preventing this from happening.

Explain the equation of exchange. Describe how changes in the money supply could have negative effects on the price level.

Increasing inflationary expectations can cause:

What is economic populism? Explain how economic populism can have negative long-term effects on an economy.

Show how short-run policies that reduce unemployment can lead to inflation in the long run.

Structuralist economics emphasizes that inflation is caused by:

Describe how a relatively small government budget deficit financed by printing money can lead to severe inflation.

Latin American Economic History

Economic Growth and Latin America

Limits to Growth in Latin America

Growth and the Environment in Latin America

Latin American and Primary Commodities

Import Substitution in Latin America

Latin American Trade Policy

Exchange-Rate Policy

Financing Current-Account Deficits

Macroeconomic Stability

Poverty Inequality

Economic Policy Debates in Latin America

Filters

When the central bank makes a loan to a private sector bank, the monetary base _. When the loan is paid off, it ___.

An exchange rate shock causes P to _ and Y to _.