17. Pat, Lucy, Kiana, and Alex are comparing the starting salaries in their firs
ID: 1128093 • Letter: 1
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17. Pat, Lucy, Kiana, and Alex are comparing the starting salaries in their first jobs. The year each started his or her first job, the CPI in that year, and each person's nominal starting salary are given in Table 1. Who negotiated the highest real starting salary? A) Pat B) Lucy C) Kiana D) Alex 18. If fiscal policy is used to close an inflationary gap, the A) B) C) D) SRAS curve shifts leftward and the price level falls SRAS curve shifts rightward and the price level increases AD curve shifts rightward and the price level rises AD curve shifts leftward and the price level decreases 19. Open-market operations occur when the Federal Reserve: A) buys U.S. Treasury bills from the federal government. B) buys or sells foreign currency C) buys or sells existing U.S. Treasury bills. D) sells U.S. Treasury bills to the federal government A major problem with bank runs is that they: A) spread to other banks. B) cause inflation, because the money moves so fast in the economy C) cause interest rates to fall. D) cause both inflation and interest rates to fall. 20. 21. Bank reserves can be held in the form of A) loans and cash in the bank's vault B) loans and deposits with the Fed C) loans and checking accounts D) deposits with the Fed and cash in the bank's vault 22. Monetary policy affects the equilibrium level of Real GDP and the equilibrium Price Level by shifting A) Aggregate Demand. B) Short Run Aggregate Supply. C) Long Run Aggregate Supply. D) Money Demand.Explanation / Answer
If fiscal policy is used to close an inflationary gap, the:
D) the AD curve shifts leftward and the price level decreases.
This is becuase, in case of inflationary gap, there must be a contractionary fscal policy involved.
19.
Open-market operation occurs when the Federal Reserve:
C) buys or sells existing U.S. treasury bills.
20.
A major problem with bank runs is that they:
A) spread to other banks.
21.
Bank reserves can be held in the form of:
D) deposits with the Fed and cash in the bank's vault.
22.
Monetary policy affects the equilibrium level of Real GDP and the equlibrium price level by shifting:
A) aggregate demand.
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