23>>Which of the following is not a part of the Basic Keynesian Model

Select one:

a.The government has a role to play in fighting inflation

b.The government should play no part in the economy

c.The government has a role to play in addressing unemployment

d.Monetary and fiscal policies should be used to manage the macro-economy.

24>> The Keynesian analysis of aggregate demand indicates that a decline in the price level causes

Select one:

a.a decline in the real money supply, an increase in interest rates, a decline in investment spending, and a decline in aggregate output demanded.

b.an increase in the real money supply, a decline in interest rates, an increase in investment spending, and an increase in aggregate output demanded.

c.a decline in the real money supply, a decline in interest rates, an increase in investment spending, and an increase in aggregate output demanded.

d.an increase in the real money supply, an increase in interest rates, a decline in investment spending, and a decline in aggregate output demanded.

25>>The aggregate supply curve is upward sloping because:

Select one:

a.in the short run, costs of many factors that go into producing goods and services are flexible, meaning their price for the unit of output will fall

b.in the long run, costs of many factors that go into producing goods and services are flexible, meaning their price for the unit of output will rise

c.in the short run, costs of many factors that go into producing goods and services are fixed, meaning their price for the unit of output will rise

d.in the short run, costs of many factors that go into producing goods and services are fixed, meaning their price for the unit of output will fall

26>>Suppose the level of output of an economy (Y) is initially at $2400. Assume taxes are autonomously given, and constant. This is not a full employment level of Y. Suppose the full employment level of Y would be $3200. If the MPS with respect to disposable income is .6, how much would the government spending have to change for the economy to move to the full employment level of Y? The government spending must:

Select one:

a.Decrease by $320

b.decrease by $ 480.

c.increase by $ 320.

d.increase by $ 480.

27>>The multiplier concept is important in the Keynesian model because

Select one:

a.it is crucial to understanding why changes in investment spending has no impact on of business cycles fluctuations.

b.it explains why a large change in autonomous spending has such a small impact on equilibrium output.

c.When there is change in autonomous spending, there is an equal change in output

d.it explains why a small change in autonomous spending can have a large impact on equilibrium output.

28>>>Which of the following statements is TRUE?

Select one:

a.The aggregate demand curve is horizontal in the long run

b.In the long run, the aggregate supply curve slopes upwards

c.In the long run, an increase in the price level will cause output to increase.

d.The long-run aggregate supply curve is perfectly inelastic at the full employment output level.

29>>. In the simple Keynesian model investment is

Select one:

a.A function of level of income.

b.Variable.

c.A function of the price level

d.A function of the interest rate.

30>> Lower interest rates will likely

Select one:

a.Encourage less spending by the Government

b.Decrease consumption

c.Discourage firms from borrowing more

d.Reduce the cost of borrowing for firms