Question 4 (1 point) A change in which of the following would not shift long-run

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Question 4 (1 point)

A change in which of the following would not shift long-run AS?

Question 4 options:

physical capital stock

productivity

human capital stock

inflation expectations

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Question 5 (1 point)

Which of the following are should policy makers take into account in addition to the interest rate?

Question 5 options:

unexpected changes in inflation

adverse selection and moral hazard

asset prices such as homes

all of the above

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Question 6 (1 point)

Expansionary monetary policy results in which impact to investment spending

Question 6 options:

decreases in investment

increases in investment

decreases in aggregate output which encourages savings

decrease in the real interest rate causing savings to fall

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Question 7 (1 point)

The AD curve shifts to the right if _____ decrease(s).

Question 7 options:

consumption

money supply

taxes

business investment

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Question 8 (1 point)

A loose labor market occurs when output is _____ the natural rate.

Question 8 options:

above

below

equal to

none of the above

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Question 9 (1 point)

When a central bank increases the money supply

Question 9 options:

interest rates fall.

firm q values decrease

firm cash flows decrease

all of the above.

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Question 10 (1 point)

Which is the most important variable monetary policy that has an impact on investment?

Question 10 options:

real interest rates

nominal interest rates

inflation

home prices

physical capital stock

productivity

human capital stock

inflation expectations

Explanation / Answer

4. Option D is correct.

Inflationary expectations would only shift the short run aggregate supply curve but not the long run supply curve.

5. Option D is correct.

While formulating a policy the policy maker needs to consider all the aspects of the economy.

6. Option A is correct.

Wit an expansionary monetary policy, the interest rates fall due to excess supply of money and the lower interest rates encourage investment to flourish.

7. Option C is correct.

When taxes fall the disposable income of the consumers increases and hence the aggregate demand shifts to the right.

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