Question 1

An autonomous depreciation of the U.S. dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S. net exports,everything else held constant.

Accepted Answer

A) cheaper;decline 
B) cheaper;rise 
C) more expensive;decline 
D) more expensive;rise 
A) cheaper;decline 
B) cheaper;rise 
C) more expensive;decline 
D) more expensive;rise

Question 2

Use the following Situation to answer the question : situation 20-1
Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 0.9.
-Using the information contained in Situation 20-1,if planned investment decreases by $100,the equilibrium aggregate output will change by

Accepted Answer

A) -$1,000. 
B) $-100. 
C) $100. 
D) $1,000. 
A) -$1,000. 
B) $-100. 
C) $100. 
D) $1,000.

Question 3

Factors that influenced planned investment spending include

Accepted Answer

A) real interest rates. 
B) financial frictions. 
C) emotional waves of optimism and pessimism. 
D) all of the above. 
E) A and C. 
A) real interest rates. 
B) financial frictions. 
C) emotional waves of optimism and pessimism. 
D) all of the above. 
E) A and C.

Question 4

Use the following Situation to answer the question : situation 20-1
Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 0.9.
-Using the information in Situation 20-1,if aggregate output equals $8,000,the unplanned inventory investment equals

Accepted Answer

A) -$100. 
B) $0. 
C) $100. 
D) $500. 
A) -$100. 
B) $0. 
C) $100. 
D) $500.

Question 5

A reduction in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________,everything else held constant.

Accepted Answer

A) rise;LM;right 
B) fall;IS;left 
C) fall;LM;left 
D) rise;IS;right 
A) rise;LM;right 
B) fall;IS;left 
C) fall;LM;left 
D) rise;IS;right

Question 6

Other things equal,a decrease in autonomous consumption shifts the ________ curve to the ________.

Accepted Answer

A) IS;right 
B) IS;left 
C) LM;left 
D) LM;right 
A) IS;right 
B) IS;left 
C) LM;left 
D) LM;right

Question 7

Everything else held constant,if aggregate output is to the right of the IS curve,then there is an excess ________ of goods which will cause aggregate output to ________.

Accepted Answer

A) supply;fall 
B) supply;rise 
C) demand;fall 
D) demand;rise 
A) supply;fall 
B) supply;rise 
C) demand;fall 
D) demand;rise

Question 8

The ________ describes points for which the goods market is in equilibrium.

Accepted Answer

A) LM curve 
B) IS curve 
C) consumption function 
D) investment schedule 
A) LM curve 
B) IS curve 
C) consumption function 
D) investment schedule

Question 9

The negative relation between investment spending and the interest rate is what gives the ________ curve its ________ slope.

Accepted Answer

A) IS;upward 
B) IS;downward 
C) LM;downward 
D) LM;upward 
A) IS;upward 
B) IS;downward 
C) LM;downward 
D) LM;upward

Question 10

Aggregate output is ________ related to autonomous consumer expenditure,and is ________ related to the level of taxes.

Accepted Answer

A) negatively;negatively 
B) negatively;positively 
C) positively;negatively 
D) positively;positively 
A) negatively;negatively 
B) negatively;positively 
C) positively;negatively 
D) positively;positively

An autonomous depreciation of the U.S. dollar makes American goods relative to foreign goods and results in a in U.S. net exports,everything else held constant.

Factors that influenced planned investment spending include

A reduction in government spending causes the equilibrium level of aggregate output to at any given interest rate and shifts the curve to the ,everything else held constant.

Other things equal,a decrease in autonomous consumption shifts the curve to the .

Everything else held constant,if aggregate output is to the right of the IS curve,then there is an excess of goods which will cause aggregate output to .

The ________ describes points for which the goods market is in equilibrium.

The negative relation between investment spending and the interest rate is what gives the curve its slope.

Aggregate output is related to autonomous consumer expenditure,and is related to the level of taxes.

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Market Economies

The ISLM Model

Filters

Exam 20: The Is Curve

An autonomous depreciation of the U.S. dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S. net exports,everything else held constant.

Factors that influenced planned investment spending include

A reduction in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________,everything else held constant.

Other things equal,a decrease in autonomous consumption shifts the ________ curve to the ________.

Everything else held constant,if aggregate output is to the right of the IS curve,then there is an excess ________ of goods which will cause aggregate output to ________.

The ________ describes points for which the goods market is in equilibrium.

The negative relation between investment spending and the interest rate is what gives the ________ curve its ________ slope.

Aggregate output is ________ related to autonomous consumer expenditure,and is ________ related to the level of taxes.

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Market Economies

The ISLM Model

Filters

An autonomous depreciation of the U.S. dollar makes American goods relative to foreign goods and results in a in U.S. net exports,everything else held constant.

A reduction in government spending causes the equilibrium level of aggregate output to at any given interest rate and shifts the curve to the ,everything else held constant.

Other things equal,a decrease in autonomous consumption shifts the curve to the .

Everything else held constant,if aggregate output is to the right of the IS curve,then there is an excess of goods which will cause aggregate output to .

The negative relation between investment spending and the interest rate is what gives the curve its slope.

Aggregate output is related to autonomous consumer expenditure,and is related to the level of taxes.