macro economics

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  • Created by: amit
  • Created on: 21-04-15 21:22

1. When the central bank buys €1,000,000 worth of government bonds from the public, the money supply:

  • increases by less than €1,000,000.
  • increases by more than €1,000,000.
  • increases by €1,000,000.
  • decreases by €1,000,000.
  • does not change.
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Other questions in this quiz

2. An increase in money demand caused by an increase in income ______ the LM curve

  • causes an upward shift in
  • invalidates
  • explains
  • causes a movement along
  • causes an downward shift in

3. The key assumption of the basic Keynesian model is that in the short run firms ______.

  • change prices frequently
  • produce potential output
  • meet demand at preset prices
  • operate just as they do in the long run
  • adjust prices to bring sales in line with capacity

4. The unemployment rate equals the number of people:

  • unemployed plus discouraged workers divided by the labour force.
  • unemployed.
  • unemployed plus discouraged workers divided by the number employed.
  • unemployed divided by the labour force.
  • unemployed divided by the number employed

5. The money demand curve will shift to the left if

  • the price level decreases.
  • real income increases.
  • the nominal interest rate increases
  • the nominal interest rate decreases.
  • price level increases

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