宏觀經(jīng)濟(jì)學(xué)：理論與政策（第九版）題庫(kù) 9-CH07-TB

CHAPTER7:KEYNESIANSYSTEM(III):POLICY

EFFECTSINTHEIS-LMMODEL

ADDITIONALQUESTIONS

EssayQuestionsand/orProblems:

1.Graphicallyshowanddiscussmonetarypolicyineffectivenesswithrespecttoadepression.

Figure7-5

AccordingtotheKeynesians,atthelowlevelsofincomeandinterestratesthatprevailduringa

depression,theeconomywouldbeonthenearlyhorizontalrangeoftheLMcurveandtheIScurve

wouldbeverysteep.Therefore,monetarypolicywouldbeineffectiveininfluencingoutput.

2.Ifchangesinexpectationsdrivebusinesscycles,whatrelationshipwouldweexpecttoseebetween

interestratesandoutputinaneconomy?ExplainusinganIS-LMgraphtoillustrate.

Ifexpectationsdrivebusinesscycles,thenhigherexpectationswillincreaseinvestmentandshiftthe

IScurvetotheright.Thismeansthatinterestratesandoutputshouldbepositivelycorrelated.

3.(a)GraphicallyshowandanalyzetheeffectsofanincreaseintaxesintheIS-LMmodel.

Figure7-6

AnincreaseintaxesshiftstheISscheduletotheleftfrom

ISotoISi.Incomefallsastaxesrisebecausethetax

increaselowersdisposableincome(Y-T)andcauses

consumptiontodecline.Asincomedeclinesbecauseof

thetaxincrease,moneydemanddeclinesandbond

demandincreases,andthiscausestheinterestratetofall.

(b)UtilizetheIS-LMmodelandanalyzetheeffectsofadecreaseinthequantityofmoney.

Figure7-7

AssumethattheISandLMschedulesareISoandLMo,

andincomeisatYoandinterestisatro.Adecreaseinthe

moneystockfromMotoM2wouldshifttheLMcurveup

fromLMotoLM2.Theequilibriumlevelofincomefalls

fromYotoY2andtheinterestraterisesfromroton.

4.Explaintheeffectivenessofmonetaryandfiscalpolicywhen

a.theinterestelasticityofmoneydemandishigh.

Monetarypolicyisleasteffectiveandfiscalpolicyismosteffective.

b.theinterestelasticityofinvestmentislow.

Monetarypolicyisleasteffectiveandfiscalpolicyismosteffective.

5.Supposethatbothgovernmentspendingandtaxesdecreaseby$1,000.Whathappenstoaggregate

incomeandinterestrates?Byhowmuchwilltheychange?ExplainusinganIS-LMgraphto

illustrate.

TheIScurvewilldecreaseby$1,000becausethegovernmentspendingmultiplierisgreaterthanthe

taxmultiplierbyafactorofone.AnincreaseintheIScurvewillincreasebothinterestratesand

income.

6.ComparetheeffectsofanautonomousincreaseingovernmentspendingintheIS-LMcurveversion

oftheKeynesianmodelwiththeeffectofthesameshiftwithintheclassicalmodel.

Intheclassicalmodel,anincreaseingovernmentspendinghasnoimpactonoutput.Inthe

Keynesianmodel,highergovernmentspendingincreasestheIScurve,whichincreasesinterestrates

andincreasesincome.

7.AnalyzetheeffectsofanincreaseinexpectedfutureprofitabilityintheKeynesianmodel,making

suretodiscusswhathappenstointerestratesandoutput.Providegraphstoillustrate.

AnincreaseinexpectationsincreasestheIScurve,whichincreasesinterestratesandoutput.

8.(a)WhydotheKeynesianspreferapolicymixof“tight"fiscalpolicyand"easy"monetarypolicy?

Explainthispreference.

Anexpansionarymonetarypolicyincreasesinvestment.Withanexpansionaryfiscalpolicy

investmentdeclines.Therefore,theKeynesianspreferanexpansionarymonetarypolicysince

investmentisimportantforthelong-rungrowthoftheeconomy.

(b)SincetheKeynesianspreferapolicymixofrelatively"tight"fiscalpolicyand"easy"monetary

policy,howwouldtheyrespondtoanincometaxcutinordertoexpandtheeconomy?

Theywouldliketoseeanaccommodatingmonetarypolicy-anaccommodatingincreaseinthe

moneysupplythatwillpreventtheinterestratefromrisingand,thus,preventthecrowdingoutof

investment.

9.UsinganIS-LMgraph,illustratehowthecentralbankcouldtargetinterestratesinresponseto

expansionaryfiscalpolicy.

Expansionaryfiscalpolicy,suchasincreasesingovernmentspendingorreductionsintaxes,willshift

uptheIScurveandincreaseinterestrates.Inthiscase,thecentralbankmustrespondbyincreasing

themoneysupplytoshifttheLMcurvetotherightandreduceinterestrates.Ontheotherhand,in

responsetoreductionsingovernmentspendingorincreasesintaxes,thecentralbankwillhaveto

reducethemoneysupplytokeepinterestratesfromchanging.

10.BetweenMarchandNovemberof2001,theU.S.economyexperiencedarecessionatthesametime

thatnominalinterestratesfellsignificantly.UsingtheKeynesianmodelasthebaseofyouranalysis,

whatdoesthisindicatetoyouaboutthecauseofthecauseofthe2001recession?Beasspecific

responsible,usinggraphstosupportyouranswer.

Thefactthatinterestratesandoutputfellatthesametimeindicatesthatthisrecessionwascausedby

afallintheIScurve.

AdditionalEssayQuestionsand/orProblems:

11.UsingtheIS-LMcurveframework,analyzetheeffectsofeachofthefollowingshiftsonthelevelof

incomeandtheinterestrate.

a.Afallintheautonomouscomponentofinvestment

b.Ariseina,theinterceptoftheconsumptionfunction,C=a+bYo

c.Anincreaseinthelevelofgovernmentspending

d.AnopenmarketpurchaseofsecuritiesbytheFederalReserveSystem

12.Youaregiventhefollowingtwosituations

a.Investmentisveryinterestelastic(interestsensitive)whilethedemandformoneyisveryinterest

inelastic

b.Investmentisveryinterestinelasticwhilethedemandisveryinterestinelastic

Inwhichsituationwouldmonetarypolicybemosteffectiveinchangingthelevelofincome?In

whichsituationwouldfiscalpolicybemosteffective?Explaincompletely.

13.ConsiderthefollowingIS-LMdiagram.

Figure7-8

a.Fromthegraph,whatareyouabletoinferaboutthe

interestelasticitiesofmoneydemandandof

investmentdemand?

b.WhatimplicationsdotheslopesoftheISandLM

schedulesinthediagramhaveconcerningthe

effectivenessofmonetaryandfiscalpolicies?Explain.

c.WoulditbesensibletocalltheconfigurationoftheIS

andLMschedulesinthegrapha"classicalcase?"Whyor

whynot?

14.Explainwhyadecreaseintaxescausetheinterestratetorise.Whatfactorsdeterminethemagnitude

oftheincreaseintheinterestrateforagivendecreaseintaxes?

AdditionalProblemfromtheAppendix

1.StartwiththesolutionfortheequilibriumvaluesofYandrfromquestion1intheAppendixto

Chapter5.Showhowthesevalueswouldchangeifthemoneysupplyrosefrom100toanewlevelof130.

2.Considerthefollowingeconomy:

C=.6(Y-T)

I=l,000-20r

G=180

T=180

Ms=1,500

Md=Y-50r

(a)CalculatetheISandLMcurves.Usethesecurvestodetermineequilibriuminterestratesandoutput.

(b)ExplainindetailtheintuitionbehindwhytheISandLMcurvesareslopedastheyare.Provide

graphstoaidyourexplanation.

(c)SupposethatbothGandTriseby40toG=T=220.CalculatewhatwillhappentoY*andi*?Can

youexplaintheintuitionbehindwhatisgoingonhere?Provideagraphtosupportyourexplanation.

Multiple-ChoiceQuestions:

1.IntheKeynesianview,

a.bothmonetaryandfiscalpolicycanaffectincome.

b.monetarypolicycanbeineffectivewhenmoneydemandislessinterestrateelastic.

c.fiscalpolicyisamorereliablewaytostimulateoutputduringarecession.

d.alloftheabove*

2.IntheIS-LMmodel,ifinterestratesrisewhileoutputfallsthe

a.moneysupplymusthavefallen.*

b.pricelevelmusthavefallen.

c.moneysupplymusthaverisen.

d.levelofgovernmentspendingmusthavefallen.

e.noneoftheabove.

3.IntheliquiditytrapcasewheretheLMscheduleisnearlyhorizontal,

a.bothmonetaryandfiscalpolicyarehighlyeffective.

b.monetaryandfiscalpolicyareineffective.

c.monetarypolicyisineffectiveandfiscalpolicyiseffective.*

d.fiscalpolicyisineffectiveandmonetarypolicyiseffective.

4.Thehighertheinterestsensitivityofinvestment,the

a.lesseffectiveismonetarypolicyandthemoreeffectiveisfiscalpolicy.

d.moreeffectivearebothmonetaryandfiscalpolicies.

c.lesseffectivearebothmonetaryandfiscalpolicies.

d.lesseffectiveisfiscalpolicyandthemoreeffectiveismonetarypolicy.*

5.Ifinterestratesandoutputrises,then

a.governmentspendingmayhavefallen.

b.themoneysupplymayhaverisen.

c.taxesmayhaverisen.

d.expectationsmayhaverisen.*

e.noneoftheabove.

6.Assumethemarginalpropensitytoconsumeis.8.Tooffsetafallinincomeof1,000,thegovernment

should

a.increasetaxesby$200.

b.raisetaxesby$250.

c.increasegovernmentspendingandtaxesby1,000.*

d.cuttaxesby$200.

e.bothcandd.

7.Asimultaneousreductioninbothtaxesandthemoneystockwillalways

a.increaseinterestrates.*

b.lowerincomeandraisetheinterestrate.

c.lowerincomeandraisetheinterestrate.

d.increaseincome.

e.raiseincomeandraisetheinterestrate.

8.Inthecasewheremoneydemandiscompletelyinterestinsensitive(interestelasticityequalszero),an

increaseinthequantityofmoneywill

a.increaseincomebutleavetheinterestrateunchanged.

b.increaseincomeandlowertheinterestrate.*

c.lowertheinterestratebutleaveincomeunchanged.

d.leavebothincomeandtheinterestrateunchanged.

9.TheIScurveshiftswhenallofthefollowingvariableschangeexcept

a.taxrates.

b.interestrates.*

c.governmentspending.

d.themarginalpropensitytoconsume.

e.bothbandd.

10.WithintheIS-LMcurvemodel,anincreaseingovernmentspendingfinancedbyprintingmoney

willalways

a.havenoimpactonincome.

b.lowerincomeandraisetheinterestrate.

c.increasetheinterestrate.

d.lowertheinterestrateandincreaseincome.

e.increaseincome.*

11.WithintheIS-LMcurvemodel,adeclineinexpectationswould

a.lowerincomeandtheinterestrate.*

b.increaseincomeandlowertheinterestrate.

c.lowerincome,butleavetheinterestrateunchanged.

d.lowertheinterestrate,butleaveincomeunchanged.

e.lowerincomeandincreasetheinterestrate.

12.WithintheIS-LMcurvemodel,ifthegovernmentcuttaxesatthesametimethattherewasan

autonomousincreaseininvestmentdemand,then

a.incomewouldriseandtheinterestratewouldfall.

b.incomeandtheinterestratewouldrise.*

c.incomewouldrisebuttheeffectontheinterestrateisuncertain.

d.theinterestratewouldrisebuttheeffectonincomeisuncertain.

e.theeffectsonbothincomeandtheinterestrateareuncertain.

13.Anincreaseinthemoneystockhasnoeffectonequilibriumincomewheneverthe

a.IScurveishorizontal.

b.IScurveisvertical.*

c.LMcurveisvertical.

d.LMcurveishorizontal.

14.IntheclosedeconomyIS-LMmodel,anincreaseingovernmentspendingcrowds-out

a.prices.

b.themoneysupply.

c.consumption.

d.investment.*

e.bothcandd.

15.Andecreaseinthevelocityofmoneywillshiftthe

a.IScurveup.

b.LMcurveup.*

c.LMcurvedown.

d.IScurvedown.

16.Assumethatthereisanincreaseinperceivedbankruptcyrisk.Asaresultofthiswewouldexpectto

see

a.incomeandinterestratestorise.

b.moneydemandandinterestratestofall.

c.moneydemandandinterestratestorise.*

d.moneysupplytoriseandinterestratestofall.

Figure7-1

17.ByreferringtoFigure7-1,anincreaseinthemoneystock

a.shiftstheLMscheduletotherightfromLMotoLMi.*

b.shiftstheLMscheduletotheleftfromLMotoLM2.

c.leavestheLMcurveunchangedatLMo.

d.shiftsneithertheISnortheLMschedule.

18.AccordingtoFigure7-1,adecreaseinthemoneystock

a.lowerstheinterestratetori.

b.raisestheinterestratetot2.*

c.leavestheinterestrateatro.

d.Noneoftheabove

19.ChangesinallofthefollowingshifttheLMcurveexcept

a.thepricelevel.

b.income.*

c.themoneysupply.

d.moneydemand.

e.alloftheaboveshiftLMcurve.

20.ComparingthesimpleKeynesianmodelwiththeIS-LMmodel,intheIS-LMmodel

a.thegovernmentspendingmultiplierislarger.

b.thebalancedbudgetmultiplierislarger.

c.thetaxmultiplierissmaller.*

d.thereisnodifferencebetweenanyofthemultipliers.

Figure7-2

21.WithrespecttoFigure7-2,anincreaseingovernmentspending

a.shiftstheIScurvetotheleftbyAG(-b/1-b).

b.shiftstheIScurvetotherightbyAG(1-b/1-b).

c.shiftstheIScurvetotherightbyAG(1/1-b).*

d.doesnotshifttheIScurve.

22.Monetarypolicywillbe

a.lesseffectivethehighertheinterestelasticityofinvestment,andthusthesteepertheISschedule.

b.moreeffectivethehighertheinterestelasticityofinvestment,andthustheflattertheISschedule.*

c.equallyeffectiveregardlessofwhetherornottheinterestelasticityofinvestmentishigheror

lower,ortheIScurveisflatterorsteeper.

d.moreeffectivewithaverticalIScurve.

23.Accommodatingfiscalpolicyrefersto

a.usingmonetarypolicytopreventrecessions.

b.usingfiscalpolicytopreventrecessions.

c.usingmonetarypolicytooffsetthenegativeeffectsoffiscalpolicy.

d.usingfiscalpolicytohelppoliticiansinoffice.

24.ThedifferencebetweenthesimpleKeynesianmodelandtheIS-LMcurvemodelisthatthelatter

a.excludesamoneymarketandinterestrates.

b.includesacommoditymarketandflexibleincome.

c.excludesacommoditymarketandinterestrates.

d.includesamoneymarketandflexibleinterestrates.*

Figure7-3

25.WithrespecttoFigure7-3,thehorizontaldistancebywhichtheIScurvewillshiftwithachangein

taxesisequalto

a.AT(-b/l-b).*

b.AT(1/1-b).

c.AT(l-b/l-b).

d.AT(l+b/l+b).

26.InthecasewheretheLMscheduleisrelativelysteepandtheISscheduleisrelativelyflat,themost

effectivepolicywouldbeachangein

a.moneysupply.*

b.governmentexpenditures.

c.governmentspendingfinancedbyachangeintaxes.

d.taxes.

27.ExogenousvariablesintheIS-LMmodelvariablesare

a.moneysupply

b.autonomousconsumption

c.governmentspending

d.prices

e.alloftheabove*

Figure7-4

28.AsshowninFigure7-4,anautonomousdeclineinexpectationsoffutureprofitabilitycausesthe

a.ISscheduletoshifttotheleft.*

b.ISscheduletoshifttotheright.

c.LMscheduletoshifttotheright.

d.LMscheduletoshifttotheleft.

29.AsshowninFigure7-4,forincometobeunchangedwhenthereisanautonomousdeclinein

investment,theinterestratewouldhaveto

a.risetoro.

b.falltoi2.*

c.remainconstantatri.

d.Noneoftheabove

30.Alowerinterestelasticityofinvestmentdemandleadstoa

a.steeperIScurve.*

b.flatterIScurve.

c.steeperLMcurve.

d.flatterLMcurve.

31.Ifgovernmentspendingrisesbutthecentralbankchangesthemoneysupplytopreventincomefrom

changing,then

a.bothconsumptionandinvestmentwillremainunchanged.

b.consumptionrisesandinvestmentfalls.

c.investmentfallsbutconsumptionrises.*

d.bothconsumptionandinvestmentrises.

32.IfthedemandformoneyisMd=100+.25Y-lOOrandthentheincreaseinmoneydemandrisesby

100,theLMcurveshiftstothe

a.rightby400.

b.rightby100.

c.leftby200.

d.leftby400.*

e.noneoftheabove.

33.Thoseeconomistswhobelievethatmonetarypolicyismorepowerfulthanfiscalpolicyarguethatthe

a.LMcurveisvertical.

b.IScurveishorizontal.

c.interestrateelasticityofinvestmentislarge.*

d.interestrateelasticityofinvestmentissmall.

34.Ifthegovernmentraisedtaxesandreducedgovernmentspendinginordertoreducethebudgetdeficit,

monetarypolicycouldaccommodatethispolicyby

a.increasingmoneydemand.

b.increasingmoneysupply.*

c.decreasingmoneysupply.

d.increaseunemploymentinsurance.

35.TheslopeoftheLMcurvehasbeenshowntodependmostcruciallyontheinterestelasticityof

a.consumption.

b.saving.

c.moneydemand.*

d.investment.

36.IfconsumptionisgivenbyC=300+.6(Y-T)andI=300-40r,theIScurveis

a.Y=600-2.4T-40r+G.

b.Y=600+.6Y-100r-G

c.Y=1500-1.5T-lOOr+2.5G*

d.Y=1500+.6T-100r-G

e.noneoftheabove.

37.Anincreaseinthemarginalpropensitytoholdmoney

a.resultsinanfallintheinterestrateandadeclineinincome.*

b.raisestheinterestrateandlowersincome.*

c.resultsinafallintheinterestrateandariseinincome.

d.raisesboththeinterestrateandincome.

38.Supposethatthegovernmentwantstoincreaseincomewithoutchangingtheinterestrate.Howcan

theyaccomplishthis?

a.Increasegovernmentspendingandreducethemoneysupply.

b.Increasegovernmentspendingandthemoneysupply.*

c.Increasetaxesandthemoneysupply.

d.Reducegovernmentspendingandincreasethemoneysupply.

39.IntheIS-LMmodel,anincreaseingovernmentspendinginthegoodsmarkethasanimpactonthe

moneymarketbecause

a.itincreasesthemoneysupply.

b.itincreasesincome,whichincreasesmoneydemand.*

c.itdecreasesincome,whichdecreasesmoneydemand.

d.itincreasesinterestrates,whichdecreasesmoneydemand.

e.noneoftheabove.

40.Ifthegovernmentwantedtoreduceinterestrateswithoutchangingoutput,itshould

a.increaseconsumptionandreducethemoneysupply.

b.increasethemoneysupplyandraisegovernmentspending.

c.increasethemoneysupplyandraisetaxes.*

d.bothbandc.

41.AccordingtothemodemKeynesianview,

a.boththeISandtheLMcurveslopesareintheintermediateornormalrange,wherebothmonetary

andfiscalpoliciesareeffectiveincontrollingincome.*

b.onlytheIScurveslopeisintheintermediateornormalrangeand,therefore,onlyfiscalpolicyis

effectiveincontrollingincome.

c.onlytheLMcurveslopeisintheintermediateornormalrangeand,therefore,onlymonetary

policyiseffectiveincontrollingincome.

d.neithertheISnortheLMcurveslopesareintheintermediateornormalrangeand,therefore,

neithermonetarynorfiscalpoliciesareeffectiveincontrollingincome.

42.Ifthelevelofgovernmentspendingrisesandsimultaneouslythereisafallinthemoneystock,we

definitelyknowthat

a.incomewillrise.

b.thechangeintheinterestratewillbeambiguous.

c.incomewillfall.

d.theinterestratewillfall.

e.Noneoftheabove*

43.Aliquiditytrapoccurswhenthe

a.LMcurveissteep.

b.LMcurveisvertical.

c.LMcurveisrelativelyflat.*

d.IScurveisflat.

44.TraditionalKeynesianstendtofavor

a.monetarypolicyoverfiscalpolicybecauseoftheeffectivenessofcentralbanks.

b.monetarypolicyoverfiscalpolicybecauseitreducesinterestrates..

c.fiscalpolicyovermonetarypolicybecauseitdoesn'timpactinterestrates.

d.fiscalpolicyovermonetarypolicybecauseoftheliquiditytrap.*

e.noneoftheabove.

45.Wheneverfiscalpolicyactions,suchasincometaxcuts,areutilizedtoexpandtheeconomy,the

Keynesiansprefer

a.acontractionarymonetarypolicy.

b.monetarypolicytostaythesamebecauseoftheliquiditytrap.

c.accompanyingdecreasesinthemoneysupplythatwillcausetheinterestrateto