1.Which of the following events is more likely to be considered to shift the long-run aggregate supply (LRAS) for the United States?

a)Financial crisis in 2008

b)Hurricane Ike in 2008

c)Japanese tsunami in 2011

d)Countrywide application of hydraulic fracturing technology for shale gas in 2013

2.The aggregate demand curve slopes downward because

a)people are willing to purchase expensive goods when inflation occurs

b)a lower domestic price level will induce more imports

c)a lower interest rate will associate with a lower price level to increase the consumption on durable goods

d)the law of demand works

3.When the Fed conducts an open market purchase of bonds, the

a)money supply decreases as reserves are injected into the banking system

b)demand for money increases as reserves are drained from the banking system

c)demand for money decreases as reserves are injected into the banking system

d)money supply increases as reserves are injected into the banking system

4.Which of the following Federal Reserve policy tools is used most often?

a)Open market operations

b)Changing the required reserve ratio

c)Changing the discount rate

d)Changing the prime lending rate

5.Assume that the Fed will lower the interest rate in the near future. A speculative investor is likely to ____ U.S. T-Bill (bond) now then____them in the near future.

a)sell; buy

b)buy; sell

6.The crowding-out effect of expansionary fiscal policy results from

a)a higher interest rate associated with an increasing government spending.

b)a lower interest rate associated with an increasing government spending.

c)a stronger money demand with a decreasing government spending.

d)a higher interest rate associated with a decreasing government spending.

7.Restrictive monetary policy

a)reduces aggregate demand and increases inflationary pressures.

b)reduces both aggregate demand and inflationary pressures.

c)increases both aggregate demand and inflationary pressures.

d)increases aggregate demand and reduces inflationary pressures.

8.Which of the following persons is considered to be unemployed?

a)Andy, a college student is still looking for summer part-time work.

b)Betty, who is on strike.

c)Connie, who is on vacation but will soon return to the same job.

d)Denny, who is on welfare.

9.In the end of summer, go-back-to-school students will generally _____ the periodic unemployment rate because ______.

a)raise; more people get a job.

b)lower; more people get a job.

c)raise; fewer people search a job.

d)lower; fewer people search a job.

10.If all the other factors remain, depreciation on U.S. dollar will shift the aggregate

a)demand curve to the right.

b)demand curve to the left.

c)short-run supply curve to the right.

d)short-run supply curve to the left.