Which of the following would shift the FE line to the left?

Which of the following would shift the FE line to the left?

a. A decrease in the future marginal productivity of capital
b. A decrease in the capital stock
c. An increase in labor supply
d. A beneficial supply shock

Answer: B

Which of the following changes shifts the long-run aggregate supply curve to the right?

Which of the following changes shifts the long-run aggregate supply curve to the right?

a. A decrease in the demand for labor
b. A decrease in taxes (assuming Ricardian equivalence doesn't hold)
c. An increase in consumer confidence
d. A demographic change that increases the labor supply

Answer: D

In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts up and to the right, and the Fed wants to keep output unchanged in the short run and the price level unchanged in the long run, it will

In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts up and to the right, and the Fed wants to keep output unchanged in the short run and the price level unchanged in the long run, it will

a. shift the LR curve up.
b. not shift the LR curve.
c. shift the IS curve up and to the right.
d. shift the LR curve down.

Answer: A

Changes in reserve requirements directly and immediately affect

Changes in reserve requirements directly and immediately affect

a. the monetary base.
b. banks' holdings of securities.
c. the money multiplier.
d. the Fed's holdings of foreign exchange.

Answer: C