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D Question 1 1 pts Assume that the economy is operating at a full-employment equilibrium when the federal government increases its purchases of airplanes from Boeing. In the short run O AD increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. O Inflationary expectations rise causing the economy to operate with a positive gap. O Inflationary expectations fall causing the economy to operate with a positive gap. D Question 2 1 pts Assume that the economy is operating at a full-employment equilibrium when, the election of a new president causes a sense of optimism to sweep the country. In the short run, O AD increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. O Inflationary expectations rise causing the economy to operate with a positive gap. O Inflationary expectations fall causing the economy to operate with a positive gap. D Question 3 1 pts Assume that the economy is operating at a full-employment equilibrium when, households decide to increase their level of savings. In the short run O AD increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap.D Question 5 1 pts If autonomous consumption decreases, then The AD curve will shift to the right O There will be a movement to the left along the AD curve. There will be a movement to the right along the AD cure. O The AD curve will not be affected. O The AS curve willshift to the left O The AD curve willshift to the left D Question 6 1 pts Assume that the economy is operating at a full-employment equilibrium when, the Federal Reserve drastically reduces interest rates. In the short run, O AD Increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD Increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. O Inflationary expectations rise causing the economy to operate with a negative gap. O Inflationary expectations fall causing the economy to operate with a positive gap. D Question 7 1 pts Assume that the economy is operating at a full-employment equilibrium when Asian nations decide to block imports from the US. In the short-run. O AD Increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD Increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. O Inflationary expectations rie causing the economy to operate with a negative gap. O Inflationary expectations fall causing the economy to operate with a positive gap.D Question B 1 pts If the market interest rate on a student loan is 10% and the expected rate of inflation for the next 5 years is 4%, then the real interest rate is 10% 0 4% 0 4% D Question 9 1 pts If you have rational expectations, then your estimate of your expected grade uses all available information. True Fake D Question 10 1 pts Assume that the economy is operating at a full-employment equilibrium when Congress cuts spending for Medicaid, food stamps, and education. In the short-run O AD Increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD Increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. Inflationary expectations rise causing the economy to operate with a negative gap. O Inflationary expectations fall causing the economy to operate with a positive gap.Question 11 1 pts Assume that the economy is operating at a full-employment equilibrium when the business community intentionally increases inventory investments. In the short run O AD Increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD Increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. O Inflationary expectations rie causing the economy to operate with a negative gap. O Inflationary expectations fall causing the economy to operate with a positive gap. Question 12 1 pts Assume that the economy is operating at a full-employment equilibrium when a financial crisis leads to a significant decline in the value of housing. In the short run O AD Increases causing the economy to operate with a positive gap. O AD decreases causing the economy to operate with a positive gap. O AD Increases causing the economy to operate with a negative gap. O AD decreases causing the economy to operate with a negative gap. O Inflationary expectations rie causing the economy to operate with a negative gap. O Inflationary expectations fall causing the economy to operate with a positive gap. Question 13 1 pts When an economy experiences stagflation. O diinflation I combined with declining output O deflation b combined with rising output O Inflation Is combined with declining output O Inflation b combined with rbing outputD Question 14 1 pts Following a decrease in the AD curve, we anticipate that inflationary expectations will O adjust upward bringing the economy back to potential GOP at a lower Inflation rate. O adjust upward bringing the economy back to potential GOP at a higher Inflation rate. O adjust downward bringing the economy back to potential GOP at a lower Inflation rate. O adjust downward bringing the economy back to potential GDP at a higher inflation rate. D Question 15 1 pts Following an Increase In the AD curve, we anticipate that Inflationary expectations will " adjust upward bringing the economy back to potential GOP at a lower Inflation rate. O adjust upward bringing the economy back to potential GOP at a higher Inflation rate. O adjust downward bringing the economy back to potential GOP at a lower Inflation rate. adjust downward bringing the economy back to potential GDP at a higher inflation rate.D Question 4 1 pts Households might hold wealth in which of the following? (Select all that apply) O Homes O Savings bonds O Cash hidden in a cookie jar O Stocks