Guide me in the following:
38. The circular flow of economic activity between 40. Which of the following is most likely to increase consumers and producers includes which of the if the public decides to increase its holdings of following? currency? 1. Households buy factor services from firms. (A) The interest rate II. Households sell factor services to firms. (B) The price level III. Households buy outputs from firms. (C) Disposable personal income IV. Households sell outputs to firms. (D) Employment (A) III only (E) The reserve requirement (B) IV only (C) I and II only 41. During a mild recession, if policymakers want to (D) II and III only reduce unemployment by increasing investment, (E) III and IV only which of the following policies would be most appropriate? 39. Suppose the required reserve ratio is 20 percent (A) Equal increases in government expenditure and a single bank with no excess reserves and taxes receives a $100 deposit from a new customer. (B) An increase in government expenditure only The bank now has excess reserves equal to (C) An increase in transfer payments (A) $20 (D) An increase in the reserve requirement (B) $80 (E) Purchase of government securities by the Federal Reserve (C) $100 (D) $400 (E) $50042. Which of the following monetary and scal policy combinations would most likelyresultinadeereaseinaggxegaledemand? We mm Mittendirt: (A) lower Buy bonds Inerease (B) Lower Buy bonds Decrease (C) Raise Sell bonds Increase (D) Raise Buy bonds Increase (E) Raise Sell bonds Decrease 43. Which of the following is true of supply shocks? (A) 'Iheytendtoehange bothrelativepricesandthegeneral priulevelinthe economy. (B) They affect only the general price level. (C) 111ey can be anticipated and offset with appropriate scal policy. (13} They can be mtioipated and offset with appropriate monetary policy. (E) They make the aggregate supply curve vertical. 44. Suppose that, from 1985 to 1986. unemployment fell from 7.2 to 7.0 percent and ination fell from 3.3 to 1.1 percent. An explanation of these changes might be that the (A) aggregate demand curve shifted to the left (B) aggregate demand curve shifted to the right (C) aggregm supply curve shifted to the left (D) aggregate supply curve shifted to the right (E) short-run Phillips curve shifted to the right 45. 46. Ifhigher United States interest rates cause foreign demand for the dollar to increase, which of the following will occur to the international value of the dollar and to United States exports? International Value M m (A) Increase Increase (B) Increase Decrease (C) Increase No change (D) Decrease Increase (E) Decrease Decrease The table below indicates the number of labor hours required in Countries X and Y to produce one unit of food or one unit of clothing. Country Food Clothing X 20 hours 50 hours Y ID hours 20 hours 48. An increase in the labor force participation rate will (A) increase investment and decrease savings (B) increase savings and decrease investment (C) have no effecton unemployment (D) make it easier to reduce unemployment (E) make it more difficult to reduce unemployment 49. Which of the following is a key feature of Keynesian economics? (A) The level of saving depends mostly on interest rates. (B) The level of government expenditure depends mostly on interest rates. (C) Supply creates its own demand. (D) Macroeconomic equilibrium can occur at less than full employment. (E) Wages are more exible than prices
