From the following symptom, given a recession is going on, what kind of shock is likely to have caused it given....

Industry surveys show companies at or near full production capacity

A. Aggregate supply

B. Neither

C. Aggregate demand

Rank the following policy interventions in terms of likely speed of implementation from fastest to slowest

A. Automatic fiscal stabilizers or monetary policy, fiscal policy

B. Monetary policy, fiscal policy, automatic fiscal stabilizers

C. Fiscal policy, automatic fiscal stabilizers, monetary policy

D. Fiscal policy, monetary policy, automatic fiscal stabilizers

According to the Laffer curve given the level of taxes in the US economy, the government could increase tax revenues by....

A. decreasing interest rates

B. decreasing income tax rates

C. None of the above

D. increasing interest rates

E. increasing income tax rates

If the economy starts off on the production possibility frontier and experiences a positive aggregate demand (AD) shock due to increased consumer optimism. What will the effect of this AD shock be on the economy's level of output and unemployment ratein the long run?

A. Output will be unaffected; unemployment rate will decrease.

B. Output will increase; unemployment rate will decrease.

C. Output will be unaffected; unemployment rate will be unaffected

D. Output will increase; unemployment rate will be unaffected.

E. None of the above

If the economy starts offinsidethe production possibility frontier and experiences a positive aggregate demand (AD) shock due to increased consumer optimism. What will the effect of this AD shock be on the economy's level of output and unemployment ratein the long run?

A. Output will be unaffected; unemployment rate will decrease.

B. Output will increase; unemployment rate will decrease.

C. Output will increase; unemployment rate will be unaffected.

D. None of the above

E. Output will be unaffected; unemployment rate will be unaffected.

When the Federal Reserve includes in an announcement that "the Committee seeks to foster maximum employment and price stability", this is

A. standard language that doesn't contain new information

B. new information announcing a monetary contraction

C. new information announcing a general policy change that does not affect the business cycle

D. new information announcing a monetary stimulus

When the Federal Reserve includes in an announcement"On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent..." and also mentions "the Committee's symmetric 2 percent objective", this is

A. new information suggesting a monetary stimulus will be enacted

B. new information suggesting a monetary contraction will be enacted

C. standard language that doesn't contain new information

D. new information suggesting a general policy change that does not affect the business cycle

Federal Reserve policy has _____________ compared to before the 1930s

A. changed a lot

B. not changed much

The money supply of country X has been growing for many years causing expected inflation of 8% per year. The economy's current GDP growth rate is 1%. The Central Bank's full employment target GDP growth rate is 5%. The "real" interest rate, r, is 4%.

Approximately what is the starting nominal interest rate before any new policy starts?

A. 11%

B. 8%

C. 6%

D. 13%

E. 12%

The money supply of country X has been growing for many years causing expected inflation of 8% per year. The economy's current GDP growth rate is 1%. The Central Bank's full employment target GDP growth rate is 5%. The "real" interest rate, r, is 4%.

If the Central bank follows a Taylor rule policy, with speed of adjustments ay and a = 0.5, where 6% is the new target inflation rate, what should their target nominal interest rate be set at?

A. 9%

B. 10%

C. 11%

D. None of the above

E. 12%