Answer Happy

Stagflation is caused by
a. an adverse shock to aggregate supply.
b. an expansion in aggregate demand.
c. a favorable shock to aggregate supply.
d. a contraction in aggregate demand.
If Turkish central bank expand money supply as a response to an
adverse supply shock, it will
Select one:
a. make the resulting recession deeper than it otherwise would
be.
b. stabilize aggregate demand at its previous level.
c. keep the economy closer to its natural levels of output and
employment.
The theory of liquidity preference explains that the central
bank can increase the ........ money and ...... the interest
rate.
Select one:
a. supply of/lower
b. demand for/rise
c. demand for/lower
d. supply of/rise
At the intersection of the IS and LM curves
Select one:
a. the goods market and money market are both in equilibrium
b. the goods market disequilibrium offsets the money market
disequilibrium.
c. the economy is at full employment.
d. the economy has the right balance of inflation and
unemployment.
........... causes income to decline and the interest rate to
rise in an IS-LM model.
Select one:
a. a decrease in money supply
b. an increase in money supply
c. an increase in taxes
d. a decrease in taxes
The LM curve slopes upward because ...... income increases .....
and in turn the interest rate.
Select one:
a. lower/supply of
b. higher/money demand for
c. higher/supply of
d. lower/money demand for
An increase in government expenditure shifts the ..... curve to
the ...............
Select one:
a. LM/left
b. IS/left
c. LM/right
d. IS/right
The IS curve slopes downward because a ..... interest rate
reduces ...... and thus income.
Select one:
a. lower/money demand
b. higher/planned investment
c. lower/planned investment
d. higher/money demand
Suppose the Fed reduces the money supply by 5 percent. Assume
the velocity of money (V) is constant. The AD curve shifts to the
...........
Select one:
a. to the left
b. to the right
c. no change