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Question
The price of a barrel of oil doubled between 2007 and the middle of To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007. Which of the following is an appropriate description of the mechanism that would have ensued?A. The increase in the price of oil would have immediately shifted the AS curve to the right.
B. The financial crisis would have led to a sharp contraction in spending shifting the AD curve to the right.
C. Shifts in both the AD and the AS curve would have ensued in the short-run but as long as neither shock had an impact on potential output, ultimately unemployment will have been unaffected in the long run.
D. All of the above.
E. None of the above.
Answer
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Related questions
Q:
In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the natural rate level.
A. exceeds; rise; right
B. exceeds; fall; left
C. remains below; fall; right
D. remains below; rise; left
Q:
An increase in the money ________ shifts the LM curve to the ________, causing the interest rate to fall and output to rise, everything else held constant.
A. demand; right
B. demand; left
C. supply; right
D. supply; left
Q:
A policy in which the money supply is kept growing at a constant rate regardless of the state of the economy is
A. a Taylor rule.
B. a discretionary policy.
C. a policy rule advocated by monetarists.
D. advocated by activists.
Q:
The argument that econometric policy evaluation is likely to be misleading if policymakers assume stable economic relationships is known as
A. the monetarist revolution.
B. the Lucas critique.
C. public choice theory.
D. new Keynesian theory.
Q:
The Lucas critique indicates that
A. advocates of discretionary policies' criticisms of rational expectations models are well-founded.
B. advocates of discretionary policies' criticisms of rational expectations models are not well-founded.
C. expectations are important in determining the outcome of a discretionary policy.
D. expectations are not important in determining the outcome of a discretionary policy.
Q:
An autonomous tightening of monetary policy
A. causes an upward movement along the monetary policy curve.
B. causes a downward movement along the monetary policy curve.
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D. shifts the monetary policy curve downward.
Q:
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A. the federal funds rate.
B. the primary credit rate.
C. the secondary credit rate.
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Q:
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A. borrowers; depositors
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A. deposits; smaller
B. deposits; larger
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D. currency; larger
Q:
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A. $1,000.
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Q:
Which of the followings is NOT a current duty of the Board of Governors of the Federal Reserve System?
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A. Sarbanes-Oxley Act of 2002
B. Global Legal Settlement of 2002
C. Gramm-Leach-Bliley Act of 1999
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C. Requires a CEO and CFO to certify that periodic financial statements and disclosure of the firm are accurate.
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Q:
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Q:
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A. supply; fall
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Q:
Everything else held constant, if aggregate output is to the left of the IS curve, then there is an excess ________ of goods which will cause aggregate output to ________.
A. supply; fall
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A. IS; upward
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Q:
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Q:
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D. lenders failure to monitor borrowers.
Q:
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C. Federal Reserve policy decisions.
D. shocks to tastes and technology.
Q:
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B. interest rates decreased before output decreased.
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Q:
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Q:
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Q:
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Q:
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B. commercial papers.
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Q:
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B. Term Auction Facility.
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Q:
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Q:
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A. reserve requirements; monetary base
B. reserve requirements; money multiplier
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