21 Question text Which of the following is more likely to happen when consumer confidence rises? a. a rightward shift in the IS curve b. a leftward shift in the IS curve c. an upward shift in the LM curve d. a downward shift in the LM curve Question22 Question text Which of the following effects would a decline in consumer confidence most likely have?? a. a downward shift in the LM curve b. an upward shift in the LM curve c. a rightward shift in the IS curve d. a leftward shift in the IS curve Question23 Question text The LM curve will shift when which of the following occurs? a. a reduction in government spending b. a reduction in the MS c. a reduction in consumer confidence d. all of these Question24 Question text Which of the following is the most accurate description of the LM curve? a. the combinations of i and Y that maintain equilibrium in the goods market b. the combinations of i and Y that maintain equilibrium in financial markets c. illustrates the effects of changes in i on desired money holdings by individuals d. illustrates the effects of changes in i on investment Question25 Question text Which of the following effects would an increase in government expenditure most likely have? a. a rightward shift in the IS curve b. a leftward shift in the IS curve c. a downward shift in the LM curve d. an upward shift in the LM curve Question26 Question text Which of the following statements most accurately describes the real interest rate (r)? a. the amount of goods we must give up next year in order to consume more goods today b. the amount of dollars we must give up next year in order to have more dollars today c. the amount of dollars we must give up next year in order to consume more goods today d. the amount of dollars we must give up today in order to have more dollars next year Question27 Not yet answered Marked out of 1.00 Flag question Question text Which of the following best describes the borrowing rate? a. a nominal interest rate. b. the rate at which consumers and firms can borrow. c. determined by monetary policy. d. a risk premium. Clear my choice Question28 Not yet answered Marked out of 1.00 Flag question Question text The nominal interest rate would be equivalent to the real interest rate under which of the following assumptions? a. Expected inflation is equal to the nominal interest rate. b. Expected inflation is equal to zero. c. Expected inflation is negative. d. Expected inflation is equal to the real interest rate. Clear my choice Question29 Not yet answered Marked out of 1.00 Flag question Question text If the expected inflation rate is negative, the expected real interest rate must be a. negative. b. equal to the nominal interest rate. c. greater than the nominal interest rate. d. less than the nominal interest rate. Clear my choice Question30 Not yet answered Marked out of 1.00 Flag question Question text Which of the following variables influences people's decisions about how much money and bonds they should hold? a. both the nominal and real interest rates b. the expected inflation rate only c. the nominal interest rate only d. the real interest rate only Clear my choice Question31 Not yet answered Marked out of 1.00 Flag question Question text The capital ratio is the ratio of a bank's a. assets divided by its liabilities b. capital divided by its total liabilities. c. income divided by its assets. d. capital divided by its assets. Clear my choice Question32 Not yet answered Marked out of 1.00 Flag question Question text Which of the following equals demand in a open economy? Select one: a. C + I + G + X - IM b. C + I + G c. C + I + G + X d. C + I + G - IM Clear my choice Question33 Not yet answered Marked out of 1.00 Flag question Question text When the economy is in equilibrium, we can be assured that a. total saving equals investment. b. private saving equals investment. c. public saving equals government spending minus taxes d. the difference of total savings and investment is zero. Clear my choice Question34 Not yet answered Marked out of 1.00 Flag question Question text Which of the following describes an increase in the budget deficit that reduces investment? a. the crowding in of investment. b. the crowding out of the budget deficit. c. the crowding out of investment. d. the crowding in of the budget deficit. Clear my choice Question35 Not yet answered Marked out of 1.00