1 Trade between countries: a. allows each country to consume at a point outside
ID: 1245374 • Letter: 1
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1 Trade between countries: a. allows each country to consume at a point outside its production poss. frontier. b. limits a countrys ability to produce goods/services on its own c. must benefit bth countris equally; otherwise, trade is not mutually beneficial d. can be best understoof by examing the countres' absolute advantage 2 If the stock market crashes, a. aggregated demand increases, fed could offset by increasing money supply b aggregateddemand increase, fed could decrease money supply c. aggregated deamand decrease, fed cold increase money d. aggregated deamand decrease, fed could decrease money supply 3 when conducting an open market purchase, the fed a. buys gov. bonds, increase money supply b buy gov bonds, decrease money supply c. sell gov bonds, increase money supply d, sel gov bonds, decrease money supply 4 which of the following policies woud be advocated by someone who wants the gov to follow an active stabilization when the economy is expereincing severe unemployment? a. decrease he mony supply b increase gov expensitures c. increase taxes d all correct. 5. initally, the economy is in long run equilibrium. Aggregated demand then shifts leftward by 50 billion. The governemnt wants to increase its spending in order to avoid a recession. Ifthere is no crowding out, ad if the MPC equals 0.8, then by how much go government purchses have to increase in order t offset the 50 billion leftward shift? a.. by 50 billion b.. by 10 billion. c by 20 billion d by 25billion.Explanation / Answer
1)c { you mentioned in one of your comments that this is wrong but believe me this is right} 2)c 3)a 4)b 5)b I have given a lot of thought to all the answers before posting and I believe that answers are correct.So it would be quite help full if you please rate. If you need the reasons for all options then please leave me a comment i'll clarify you doubts.
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