Question 1

A fiscal policy cure for inflation includes:

Accepted Answer

A)  Patience. 
B)  An increase in the reserve requirement. 
C)  A reduction in tax rates for corporations and households. 
D)  A decrease in government spending. 
A)  Patience. 
B)  An increase in the reserve requirement. 
C)  A reduction in tax rates for corporations and households. 
D)  A decrease in government spending.

Question 2

Fiscal policy includes:

Accepted Answer

A)  The discount rate. 
B)  Education and job training. 
C)  Changes in government spending. 
D)  Changes in interest rates. 
A)  The discount rate. 
B)  Education and job training. 
C)  Changes in government spending. 
D)  Changes in interest rates.

Question 3

Automatic stabilizers include:

Accepted Answer

A)  Changes in the money supply that are initiated by the Fed. 
B)  Discretionary fiscal policy that must be determined by Congress. 
C)  Government spending changes that are triggered by the economy,not government decision-makers. 
D)  Supply-side policies that Congress and the president design to stimulate the economy. 
A)  Changes in the money supply that are initiated by the Fed. 
B)  Discretionary fiscal policy that must be determined by Congress. 
C)  Government spending changes that are triggered by the economy,not government decision-makers. 
D)  Supply-side policies that Congress and the president design to stimulate the economy.

Question 4

Which of the following believe that during a recession the appropriate policy is an increase in government spending,which sets off a multiplier reaction?

Accepted Answer

A)  Keynesians. 
B)  New classical economists. 
C)  Monetarists. 
D)  Supply-siders. 
A)  Keynesians. 
B)  New classical economists. 
C)  Monetarists. 
D)  Supply-siders.

Question 5

Which of the following is an example of fiscal policy?

Accepted Answer

A)  An increase in income taxes. 
B)  Deregulation of financial institutions. 
C)  Relaxed immigration laws. 
D)  An increase in the discount rate. 
A)  An increase in income taxes. 
B)  Deregulation of financial institutions. 
C)  Relaxed immigration laws. 
D)  An increase in the discount rate.

Question 6

Which group looks for ways to increase productive capacity and reduce import barriers during a period of inflation?

Accepted Answer

A)  Supply-side economists. 
B)  Monetarists. 
C)  Keynesians. 
D)  Modern Keynesians. 
A)  Supply-side economists. 
B)  Monetarists. 
C)  Keynesians. 
D)  Modern Keynesians.

Question 7

The Fed has traditionally been willing to sacrifice interest rate stability in order to achieve low levels of inflation.

Accepted Answer

A) True 
 B)False

Question 8

Refer to Figure 16.1.  
-Refer to Figure 16.1.A shift from AD1 to AD2 could be caused by:

Accepted Answer

A)  A decrease in government spending. 
B)  An increase in the money supply. 
C)  An increase in taxes. 
D)  An increase in the incentives to save. 
A)  A decrease in government spending. 
B)  An increase in the money supply. 
C)  An increase in taxes. 
D)  An increase in the incentives to save.

Question 9

The United States has repeatedly made mistakes in the economic policy options it has chosen.

Accepted Answer

A) True 
 B)False

A fiscal policy cure for inflation includes:

Fiscal policy includes:

Automatic stabilizers include:

Which of the following believe that during a recession the appropriate policy is an increase in government spending,which sets off a multiplier reaction?

Which of the following is an example of fiscal policy?

Which group looks for ways to increase productive capacity and reduce import barriers during a period of inflation?

The Fed has traditionally been willing to sacrifice interest rate stability in order to achieve low levels of inflation.

Refer to Figure 16.1. -Refer to Figure 16.1.A shift from AD₁ to AD₂ could be caused by:

The United States has repeatedly made mistakes in the economic policy options it has chosen.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

International Trade

Filters

Exam 16: Theory and Reality

A fiscal policy cure for inflation includes:

Fiscal policy includes:

Automatic stabilizers include:

Which of the following believe that during a recession the appropriate policy is an increase in government spending,which sets off a multiplier reaction?

Which of the following is an example of fiscal policy?

Which group looks for ways to increase productive capacity and reduce import barriers during a period of inflation?

The Fed has traditionally been willing to sacrifice interest rate stability in order to achieve low levels of inflation.

Refer to Figure 16.1. -Refer to Figure 16.1.A shift from AD1 to AD2 could be caused by:

The United States has repeatedly made mistakes in the economic policy options it has chosen.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

International Trade

Filters

Refer to Figure 16.1. -Refer to Figure 16.1.A shift from AD₁ to AD₂ could be caused by: