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Question 1 1 pts If the federal government decreases 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. Question 2 1 pts A new president causes a sense of pessimism 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.Question 3 1 pts Households decide to decrease 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. 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. 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 StocksQuestion 6 1 pts The Federal Reserve raises 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. Question 7 1 pts Asian nations decide to block imports from the US. 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.Question 8 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 14%, then the real interest rate is O 10% 0 6% 0 4% 0 -4% Question 9 1 pts If you have rational expectations, then your estimate of your expected grade uses all available information. O True O FalseQuestion 10 1 pts Congress increases spending for preschool programs, family leave, and roads. 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. Question 11 1 pts The business community intentionally decreases 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 rise causing the economy to operate with a negative gap. O Inflationary expectations fall causing the economy to operate with a positive gap.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 rise 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 disinflation is combined with declining output. O deflation is combined with rising output. O inflation is combined with declining output. O inflation is combined with rising output 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 GDP at a lower inflation rate. O adjust upward bringing the economy back to potential GDP at a higher inflation rate. O adjust downward bringing the economy back to potential GDP at a lower inflation rate. O adjust downward bringing the economy back to potential GDP at a higher inflation rate.Question 15 1 pts Following an increase in the AD curve, we anticipate that inflationary expectations will O adjust upward bringing the economy back to potential GDP at a lower inflation rate. O adjust upward bringing the economy back to potential GDP at a higher inflation rate. O adjust downward bringing the economy back to potential GDP at a lower inflation rate. O adjust downward bringing the economy back to potential GDP at a higher inflation rate