Question 1

A significant political problem hindering the implementation of Keynesian policies during a recession is

Accepted Answer

A)  reaching agreement on whose taxes should be raised. 
B)  reaching agreement on whose taxes should be cut. 
C)  reaching agreement on which government programs should be cut. 
D)  reaching agreement on reducing the size of the budget deficit. 
A)  reaching agreement on whose taxes should be raised. 
B)  reaching agreement on whose taxes should be cut. 
C)  reaching agreement on which government programs should be cut. 
D)  reaching agreement on reducing the size of the budget deficit. B

Question 2

When military spending declines at the conclusion of a war, what usually happens?

Accepted Answer

A)  There is a major economic expansion. 
B)  There is a recession. 
C)  There is an increase in inflation. 
D)  There is an increase in aggregate demand. 
A)  There is a major economic expansion. 
B)  There is a recession. 
C)  There is an increase in inflation. 
D)  There is an increase in aggregate demand. B

Question 3

Keynes defined aggregate supply as

Accepted Answer

A)  the total dollar amount of money spent on goods and services by consumers, investors, government and net spending by foreigners at a given price level. 
B)  the total dollar amount of money spent on goods and services by consumers at a given price level. 
C)  the total output produced and offered for sale at a given price level by all economic units. 
D)  the total output produced and offered for sale at a given price level by the private sector. 
A)  the total dollar amount of money spent on goods and services by consumers, investors, government and net spending by foreigners at a given price level. 
B)  the total dollar amount of money spent on goods and services by consumers at a given price level. 
C)  the total output produced and offered for sale at a given price level by all economic units. 
D)  the total output produced and offered for sale at a given price level by the private sector. C

Question 4

The economy went into a recession in March 2001, what policies did President Bush implement in response?

Accepted Answer

A)  Tax cuts aimed primarily at middle class and low income consumers in order to stimulate consumption. 
B)  Tax cuts aimed primarily at wealth individuals in order to stimulate savings and investment. 
C)  Tax increases across all income groups in order to finance increased government spending. 
D)  A sharp increase in all discretionary, nonmilitary spending. 
A)  Tax cuts aimed primarily at middle class and low income consumers in order to stimulate consumption. 
B)  Tax cuts aimed primarily at wealth individuals in order to stimulate savings and investment. 
C)  Tax increases across all income groups in order to finance increased government spending. 
D)  A sharp increase in all discretionary, nonmilitary spending.

Question 5

Aggregate supply is defined as

Accepted Answer

A)  the total output that business produces and plans to sell at a given price level. 
B)  the total dollar amount of goods and services that consumers, investors, foreigners, and governments plan to buy at a given price level. 
C)  the total quantity of goods that sellers would like to sell during a given period, at various prices, holding other things constant. 
D)  the total quantity of goods that buyers would like to buy during a given period, at various prices, holding other things constant. 
A)  the total output that business produces and plans to sell at a given price level. 
B)  the total dollar amount of goods and services that consumers, investors, foreigners, and governments plan to buy at a given price level. 
C)  the total quantity of goods that sellers would like to sell during a given period, at various prices, holding other things constant. 
D)  the total quantity of goods that buyers would like to buy during a given period, at various prices, holding other things constant.

Question 6

During the Clinton years (1993 to 2001),

Accepted Answer

A)  the economy was characterized by a long period of stagnation. 
B)  the economy was characterized by a long period of rapid economic growth. 
C)  the economy was characterized by slow growth and stagnant wages during the first half of the period and by rapid growth and rising wages in the second half. 
D)  the economy was characterized by rapid growth and rising wages during the first half of the period and by slow growth and stagnant wages during the second half. 
A)  the economy was characterized by a long period of stagnation. 
B)  the economy was characterized by a long period of rapid economic growth. 
C)  the economy was characterized by slow growth and stagnant wages during the first half of the period and by rapid growth and rising wages in the second half. 
D)  the economy was characterized by rapid growth and rising wages during the first half of the period and by slow growth and stagnant wages during the second half.

Question 7

The Keynesian model provides no simple fiscal solution to

Accepted Answer

A)  a situation of high unemployment and low inflation. 
B)  a situation of low unemployment and high inflation. 
C)  a situation of high unemployment and high inflation. 
D)  a situation of low unemployment and low inflation. 
A)  a situation of high unemployment and low inflation. 
B)  a situation of low unemployment and high inflation. 
C)  a situation of high unemployment and high inflation. 
D)  a situation of low unemployment and low inflation.

Question 8

The basic formula developed in the simplified Keynesian model is

Accepted Answer

A)  raise taxes and lower spending to fight inflation during expansions. 
B)  lower taxes and increase spending to fight inflation during expansions. 
C)  raise taxes and increase spending to fight inflation during expansions. 
D)  lower taxes and lower spending to fight inflation during expansions. 
A)  raise taxes and lower spending to fight inflation during expansions. 
B)  lower taxes and increase spending to fight inflation during expansions. 
C)  raise taxes and increase spending to fight inflation during expansions. 
D)  lower taxes and lower spending to fight inflation during expansions.

Question 9

What were some of the factors that led to a budget surplus toward the end of the Clinton administration?

Accepted Answer

A)  Increased spending for education led to higher economic growth. 
B)  The government drastically reduced Social Security payments. 
C)  Spending on infrastructure such as highways and airports led to higher economic growth. 
D)  Most discretionary spending was frozen, while taxes increased with higher incomes during the expansion. 
A)  Increased spending for education led to higher economic growth. 
B)  The government drastically reduced Social Security payments. 
C)  Spending on infrastructure such as highways and airports led to higher economic growth. 
D)  Most discretionary spending was frozen, while taxes increased with higher incomes during the expansion.

Question 10

The basic formula developed in the simplified Keynesian model is

Accepted Answer

A)  raise taxes and lower spending to fight unemployment during recessions. 
B)  lower taxes and increase spending to fight unemployment during recessions. 
C)  raise taxes and increase spending to fight unemployment during recessions. 
D)  lower taxes and lower spending to fight unemployment during recessions. 
A)  raise taxes and lower spending to fight unemployment during recessions. 
B)  lower taxes and increase spending to fight unemployment during recessions. 
C)  raise taxes and increase spending to fight unemployment during recessions. 
D)  lower taxes and lower spending to fight unemployment during recessions.

Question 11

The fiscal policy that faces the fewest political obstacles is

Accepted Answer

A)  raising taxes. 
B)  cutting spending. 
C)  cutting military spending. 
D)  cutting taxes. 
A)  raising taxes. 
B)  cutting spending. 
C)  cutting military spending. 
D)  cutting taxes.

Question 12

What does the term, "fiscal policy," mean?

Accepted Answer

A)  Actions taken by the Federal Reserve to change the interest rate. 
B)  Actions taken by the Financial Accounting Standards Board to establish standards for accountants. 
C)  Actions taken by the Surgeon General to set standards for diet and exercise. 
D)  Actions taken by the government involving spending and collection of revenues. 
A)  Actions taken by the Federal Reserve to change the interest rate. 
B)  Actions taken by the Financial Accounting Standards Board to establish standards for accountants. 
C)  Actions taken by the Surgeon General to set standards for diet and exercise. 
D)  Actions taken by the government involving spending and collection of revenues.

Question 13

What is Monetarism?

Accepted Answer

A)  The belief that the economic system works well except when the government makes mistakes in monetary policy. 
B)  The belief that monetary policy can stabilize the economy in the short run. 
C)  The belief that the Federal Reserve should continually adjust the money supply to accommodate fluctuations in demand over the business cycle. 
D)  The belief that an increase in the money supply will lead to an increase in GDP. 
A)  The belief that the economic system works well except when the government makes mistakes in monetary policy. 
B)  The belief that monetary policy can stabilize the economy in the short run. 
C)  The belief that the Federal Reserve should continually adjust the money supply to accommodate fluctuations in demand over the business cycle. 
D)  The belief that an increase in the money supply will lead to an increase in GDP.

Question 14

Critics of Monetarism argue that the factor that is more important than the supply of money is

Accepted Answer

A)  the expansion and contraction of credit. 
B)  the rise and fall of demand deposits. 
C)  the quantity of currency in circulation. 
D)  the frequency of outside shocks that cause booms and busts. 
A)  the expansion and contraction of credit. 
B)  the rise and fall of demand deposits. 
C)  the quantity of currency in circulation. 
D)  the frequency of outside shocks that cause booms and busts.

Question 15

A government budget deficit is defined as

Accepted Answer

A)  the amount that a government owes to bondholders. 
B)  the amount that a government refunds to taxpayers. 
C)  the amount the government spends in excess of revenues. 
D)  the amount the government collects in excess of expenditures. 
A)  the amount that a government owes to bondholders. 
B)  the amount that a government refunds to taxpayers. 
C)  the amount the government spends in excess of revenues. 
D)  the amount the government collects in excess of expenditures.

A significant political problem hindering the implementation of Keynesian policies during a recession is

When military spending declines at the conclusion of a war, what usually happens?

Keynes defined aggregate supply as

The economy went into a recession in March 2001, what policies did President Bush implement in response?

Aggregate supply is defined as

During the Clinton years (1993 to 2001),

The Keynesian model provides no simple fiscal solution to

The basic formula developed in the simplified Keynesian model is

What were some of the factors that led to a budget surplus toward the end of the Clinton administration?

The basic formula developed in the simplified Keynesian model is

The fiscal policy that faces the fewest political obstacles is

What does the term, "fiscal policy," mean?

What is Monetarism?

Critics of Monetarism argue that the factor that is more important than the supply of money is

A government budget deficit is defined as

What Is Macroeconomics and the Evolution of Capitalism

The Classical View of the Macro-Economy

The Keynesian Revolution

National Income Accounting

Classical and Keynesian Graphical Analysis

Introduction to Economic Growth

Introduction to Business Cycles

Investment and Profit, and the Multiplier

Consumer Spending, and Credit and Interest

Housing Bubble, Financial Crisis, and Government Spending, Taxes, and Deficits

The Trade Gap

Business Cycles

Globalization and the Spread of Instability

Inflation

Monetary Policy, Financial Regulation, and Debates Over Monetary Policy

Fiscal Policy: Austerians and Deficit Hawks V Stimulus

A Road to Full Employment

Filters

Exam 16: Fiscal Policy: How to Stimulate the Economy

A significant political problem hindering the implementation of Keynesian policies during a recession is

When military spending declines at the conclusion of a war, what usually happens?

Keynes defined aggregate supply as

The economy went into a recession in March 2001, what policies did President Bush implement in response?

Aggregate supply is defined as

During the Clinton years (1993 to 2001),

The Keynesian model provides no simple fiscal solution to

The basic formula developed in the simplified Keynesian model is

What were some of the factors that led to a budget surplus toward the end of the Clinton administration?

The basic formula developed in the simplified Keynesian model is

The fiscal policy that faces the fewest political obstacles is

What does the term, "fiscal policy," mean?

What is Monetarism?

Critics of Monetarism argue that the factor that is more important than the supply of money is

A government budget deficit is defined as

What Is Macroeconomics and the Evolution of Capitalism

The Classical View of the Macro-Economy

The Keynesian Revolution

National Income Accounting

Classical and Keynesian Graphical Analysis

Introduction to Economic Growth

Introduction to Business Cycles

Investment and Profit, and the Multiplier

Consumer Spending, and Credit and Interest

Housing Bubble, Financial Crisis, and Government Spending, Taxes, and Deficits

The Trade Gap

Business Cycles

Globalization and the Spread of Instability

Inflation

Monetary Policy, Financial Regulation, and Debates Over Monetary Policy

Fiscal Policy: Austerians and Deficit Hawks V Stimulus

A Road to Full Employment

Filters