Sexton Pepperdine Econ 200 Final - Part One

Starting at full employment (RGDPnr): {Ans: Expansionary monetary policy can result in increased real output, but only in the short run}Are these all true: -Voluntary trades give both parties more in value than what they give up. -People can gain by specializing in the production of the good in which they have a comparative advantage. -Without the ability to trade, people would not tend to specialize as much in those areas where they has a comparative advantage. {Ans: Yes}(T/F) If the Fed paid a higher interest rate to banks on their reserves at the Fed, excess reserves in the banking system would tend to fall {Ans: False}(T/F) A public good is nonrivalrous and excludable {Ans: False}(T/F) The SRAS curve is vertical at the natural level of real output {Ans: False}(T/F) If input prices adjusted just as quickly as output prices, the profit effect leading to an increase in RGDP supplied would disappear {Ans: True}(T/F) A policy of a tax cut combined with increases in government purchases would shift the aggregate demand curve to the left {Ans: False}When there is a recessionary gap, real output: {Ans: Is less than the natural level of