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Macroeconomic Policy Tools

Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

Economics Mcqs, Macroeconomic Policy Tools /
Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

A. The aggregate supply curve shifts to the right by more than Rs 16 billion
B. The aggregate demand curve shifts to the left by more than Rs 16 billion
C. The aggregate demand curve shifts to the right by more than Rs 16 billion
D. the aggregate supply curve shifts to the left by more than Rs 16 billion

Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ? Read More »

Economics Mcqs, Macroeconomic Policy Tools

When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

Economics Mcqs, Macroeconomic Policy Tools /
When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

A. supply-side economics
B. None of these answers
C. The crowding-out effect
D. The multiplier effects

When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ? Read More »

Economics Mcqs, Macroeconomic Policy Tools

For the Eurozone countries, the most important source of the downward slope of the aggregate demand curve is probably ?

Economics Mcqs, Macroeconomic Policy Tools /
For the Eurozone countries, the most important source of the downward slope of the aggregate demand curve is probably ?

A. The wealth effect
B. None of these answers
C. The exchange-rate effect
D. The fiscal effect
E. The interest-rate effect

For the Eurozone countries, the most important source of the downward slope of the aggregate demand curve is probably ? Read More »

Economics Mcqs, Macroeconomic Policy Tools

When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?

Economics Mcqs, Macroeconomic Policy Tools /
When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?

A. None of these answers
B. decrease the quantity demanded of money
C. increase the quantity demanded of money
D. decreases the demand for money
E. increases the demand for money

When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ? Read More »

Economics Mcqs, Macroeconomic Policy Tools

Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?

Economics Mcqs, Macroeconomic Policy Tools /
Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?

A. The money supply shifts right prices fall spending increases and the aggregate demand curve shifts right
B. The money supply shifts right the interest rate rises investment decreases and the aggregate demand curve shifts left
C. The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
D. The money supply shifts right, prices rise, demand curve shifts left

Which of the following best describes how an increase in the money supply shift the aggregate demand curve ? Read More »

Economics Mcqs, Macroeconomic Policy Tools

Which of the following statements about stabilization policy is not true ?

Economics Mcqs, Macroeconomic Policy Tools /
Which of the following statements about stabilization policy is not true ?

A. Many economists prefer automatic stabilizers because they affect the economy with a shorter lag than activist stabilization policy
B. None of these answers are true
C. Long lags enhance the ability of policy makers to fine tune the economy
D. When policy makers implement activist stabilization policies there is a significant risk that their policies may actually have a destabilizing effect

Which of the following statements about stabilization policy is not true ? Read More »

Economics Mcqs, Macroeconomic Policy Tools