In an economy with a horizontal aggregate supply curve, a decrease in taxes will affect price level and employment in which of the following ways?

In an economy with a horizontal aggregate supply curve, a decrease in taxes will affect price level and employment in which of the following ways?

Price Level / Employment

Decrease / Increase

Increase / Increase

Increase / Decrease

Increase / No Change

No Change / Decrease

No Change / Increase

If the Federal Reserve conducts easy (expansionary) money policy to expand the money supply, it is most likely to change nominal interest rates and output in the following ways:

Nominal Interest Rate / Output

Increase / Increase

Decrease / Increase

Decrease / No Change

Increase / Decrease

Decrease / Decrease

If a major hurricane devastated industry in the eastern United States, the result would most likely cause

a decrease in aggregate supply.

an increase in aggregate demand.

a decrease in aggregate demand.

an increase in aggregate supply.

an increase in employment.

A decrease in economic growth would be graphically represented by

a decrease in the PPC and AD.

a decrease in the PPC and LRAS.

a decrease in the AD and SRAS.

a decrease in the LRAS and AD.

a decrease in the LRAS and SRAS.

Economic growth would decrease if

consumer spending decreased.

employee wages increased.

floods ravaged the manufacturing sector in the north.

government spending decreases significantly.

the number of imports increased.

The spending multiplier will decrease when the

marginal propensity to consume increases.

marginal propensity to save increases.

interest rates decrease.

savings rate decreases.

investment rate decreases.

If the nominal interest rate was 10 percent in 2008 and inflation was 3 percent, then the real interest rate was

3 percent.

4 percent.

7 percent.

10 percent.

13 percent.

Given a normal market supply curve for suitcases, if the price of suitcases increased from $189 to $202, then

there is an increase in supply of suitcases.

there is a decrease in supply of suitcases.

there is a decrease in the quantity supplied of suitcases.

there is an increase in the quantity supplied of suitcases.

cannot be determined from information given.

If the required reserve ratio is 20 percent and the Fed sells $10 million in securities, then the

money supply will increase by $10 million.

money supply will decrease by $10 million.

foreign investment in US financial assets will decrease.

money supply will increase by $50 million.

money supply will decrease by $50 million.

 
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