總體經濟學 期中考 日期：97.04.16

選擇題：每題3分

1. / According to the quantity theory of money, if output is higher, ______real balances are required, and for fixed M this means ______P.
(A) higher; lower (B) lower; higher (C) higher; higher (D) lower; lower
2. / Starting from long-run equilibrium, if the velocity of money increases (due to, for example, the invention of automatic teller machines), the Fed might be able to stabilize output by:
(A) decreasing the money supply.
(B) increasing the money supply. / (C) decreasing the price level.
(D) increasing the price level.
3. / Starting from long-run equilibrium, if a drought pushes up food prices throughout the economy, the Fed could move the economy more rapidly back to full employment output by:
(A)increasing the money supply, but at the cost of permanently higher prices.
(B)decreasing the money supply, but at the cost of permanently lower prices.
(C)increasing the money supply, which would restore the original price level.
(D)decreasing the money supply, which would restore the original price level.
4. / Making use of Okun's law, it may be computed that if the Fed reduces the money supply 5 percent and the quantity theory of money is true, then the unemployment rate will rise about:
(A)5 percent in both the short run and the long run.
(B)2.5 percent in both the short run and the long run.
(C)5 percent in the short run but will return to its natural rate in the long run.
(D)2.5 percent in the short run but will return to its natural rate in the long run.
5. / In the loanable funds model, a decrease in income ______national saving and ______the equilibrium interest rate.
(A) increases; increases
(B) increases; decreases / (C) decreases; decreases
(D) decreases; increases
6. / (Exhibit: Market for Real Money Balances) Based on the graph, if the interest rate is r1, then people will ______bonds and the interest rate will ______.
(A) sell; rise (B) sell; fall (C) buy; rise (D) buy; fall
7. / Reducing the money supply ______nominal interest rates in the short run, and ______nominal interest rates in the long run.
(A) produces no change in; raises
(B) raises; produces no change in / (C) raises; lowers
(D) lowers; raises
8. / In the Keynesian-cross analysis, assume that the analysis of taxes is changed so that taxes, T, are made a function of income, as in T = T + tY, where T and t are parameters of the tax code and t is positive but less than 1. As compared to a case where t is zero, the multiplier for government purchases in this case will:
(A) not change. (B) be smaller. (C) be bigger. (D) be equal to 1.
9. / If MPC = 0.75 (and there are no income taxes) when G increases by 100, then the IS curve for any given interest rate shifts to the right by:
(A) 100. (B) 200. (C) 300. (D) 400.
10. / If taxes are raised, but the Fed prevents income from falling by raising the money supply, then:
(A)both consumption and investment remain unchanged.
(B)consumption rises but investment falls.
(C)investment rises but consumption falls.
(D)both consumption and investment fall.
11. / If the short-run IS-LM equilibrium occurs at a level of income above the natural level of output, in the long run the ______will ______in order to return output to the natural level.
(A) price level; increase
(B) interest rate; decrease / (C) money supply; increase
(D) consumption function; decrease
12. / The Pigou effect suggests that falling prices will increase income because real balances influence ______and will shift the ______curve.
(A) money demand; LM
(B) the money supply; LM / (C) consumer spending; IS
(D) government spending; IS
13. / A liquidity trap occurs when:
(A) banks have too much currency and close their doors to new customers.
(B) the central bank mistakenly prints too much money generating hyperinflation.
(C) interest rates fall so low that monetary policy is no longer effective.
(D) dams and locks are built to prevent flooding.
14. / If the government wants to raise investment but keep output constant, it should:
(A)adopt a loose monetary policy but keep fiscal policy unchanged.
(B)adopt a loose monetary policy and a loose fiscal policy.
(C)adopt a loose monetary policy and a tight fiscal policy.
(D)keep monetary policy unchanged but adopt a tight fiscal policy.
15. / According to the Mundell-Fleming model, under fixed exchange rates expansionary fiscal policy causes income to ______, and under flexible exchange rates expansionary fiscal policy causes income to ______.
(A)increase; increase
(B)increase; remain unchanged
(C)remain unchanged; remain unchanged
(D)remain unchanged; increase
16. / In order to compensate for an expected future decline in the Japanese yen relative to the U.S. dollar, the interest rate in Japan must be ______the interest rate in the U.S.
(A) higher than (B) lower than (C) equal to (D) fixed relative to
17. / One argument favoring a fixed-exchange-rate system is that it:
(A)allows monetary policy to be used for stabilizing output and prices.
(B)reduces exchange-rate uncertainty, thereby promoting more international trade.
(C)leads to excessive growth of the money supply.
(D)requires no actions on the part of the central bank to implement.
18. / In a large open economy with a floating exchange rate, such as in the United States, in the short run a monetary contraction:
(A)raises the interest rate, lowers investment and income, but does not affect the exchange rate.
(B)raises the exchange rate, lowers net exports and income, but does not affect the interest rate.
(C)initially raises the exchange rate, causing arbitrageurs to sell dollars and return the money supply to its initial level.
(D)raises the interest rate and lowers investment and income, but also raises the exchange rate and lowers net exports.
19. / A fall in consumer confidence about the future, which induces consumers to spend less and save more, will, according to the Mundell-Fleming model with floating exchange rates, lead to:
(A) a fall in consumption and income.
(B) no change in consumption or income.
(C) no change in income but a rise in net exports.
(D) no change in income or net exports.
20. / The introduction of a stylish new line of Toyotas, which makes some consumers prefer foreign cars over domestic cars, will, according to the Mundell-Fleming model with fixed exchange rates, lead to:
(A)a fall in income and net exports.
(B)no change in income or net exports.
(C)a fall in income but no change in net exports.
(D)no change in income but a fall in net exports.

簡答題：

1. / a. An economy is initially at the natural level of output. Suppose Congress passes legislation that reduces taxes. Use the IS-LMmodel to illustrate both the short-run and long-run impact of this policy change. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium, iv. the short-run equilibrium, and v. the terminal equilibrium.(3分)
b. Explain in words the short-run and long-run impact of the change in government spending on output and interest rates. (3分)
2. / The Mundell-Fleming model takes the world interest rate as an exogenous variable. Let’s consider what happens when this variable changes.
  1. What might cause the world interest to rise? (2分)
  2. In the Mundell-Fleming model with a floating exchange rate, what happens to aggregate income, the exchange rate, and the trade balance when the world interest rate rises? (3分)
  3. In the Mundell-Fleming model with a fixed exchange rate, what happens to aggregate income, the exchange rate, and the trade balance when the world interest rate rises? (3分)

3. / The United States is certainly a large open economy. Suppose consumer confidence suddenly plummets so that consumption falls at each level of disposable income. Use the Mundell-Fleming model for a large open economy with a floating exchange rate to illustrate the short-run effects of this development on:
  1. the IS and/or LM curve(s). (2分)
  2. the domestic real interest rate. (2分)
  3. U.S. net capital outflow and net exports. (2分)
  4. the U.S. foreign exchange rate. (2分)

計算題：

1. / Assume the following model of the economy, with the price level fixed at 1.0:

  1. Write a numerical formula for the IS curve, showing Y as a function of r alone. (2分)
  2. Write a numerical formula for the LM curve, showing Y as a function of r alone. (2分)
  3. What are the short-run equilibrium values of Y, r, Y – T, C, I, private saving, public saving, and national saving? Check by ensuring that C + I + G = Y and national saving equalsI. (4分)
  4. Assume that G increases by 200. By how much will Y increase in short-run equilibrium? What is the government-purchases multiplier (the change in Y divided by the change in G)? (2分)
  5. Assume that G is back at its original level of 1,000, but (the money supply) increases by 200. By how much will Y increase in short-run equilibrium? What is the multiplier for money supply (the change in Y divided by the change in)? (2分)

2. / Assume that the LM curve for a small open economy with a fixed exchange rate is given by Y = 200r – 200 + 2(M/P). This IS curve is given by Y = 400 + 3G – 2T + 3NX – 200r. The function for the net exports is NX = 200 – 100e, where e is the exchange rate. The price level is fixed at 1.0, the world interest rate is r* = 2.0 percent, and the exchange rate is initially 1.0.
  1. If M = 100, G = 100, and T = 100, solve for the equilibrium short-run values of Y and NX. Is the initially given exchange rate equal to the equilibrium exchange rate? (3分)
  2. If the Fed buys bonds in order to raise the money supply, will equilibrium Y increase? (3分)

選擇題：

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ACCCB ABDCA

簡答題:

1. / a. /
(題目有改，答案是否相同。)
b. / The economy is initially at output Ynand interest rate r1. As a result of the increase in government spending in the short run, output increases to Y1 and the interest rate increases to r2 as the IS curve shifts from IS1 to IS2. In the long run, the price level increases, shifting the LM curve from LM1 to LM2. Output returns to Ynand the interest rate eventually increases to r3 in the long run.

計算題：

1. / a. / Y = 5,000 – 100r.
b. / Y = 3,000 + 100r.
c. / In the short-run equilibrium, Y = 4,000, r = 10, Y – T = 3,000, C = 2,400, I = 600, private saving is 600, public saving is 0, and national saving is 600.
d. / Y increases by 500. The government spending multiplier is 2.5.
e. / Y increases by 250. The multiplier for money supply is 1.25.
2. / a. / Equilibrium values are Y = 400 and NX = 100. The initially given exchange rate is equal to the equilibrium exchange rate.
b. / Equilibrium Y will not increase.

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