Question 1

When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so to ________ aggregate demand and ________ the price level.

Accepted Answer

A) lower; increase; decrease 
B) raise; decrease; increase 
C) lower; increase; increase 
D) raise; decrease; decrease 
E) raise; increase; decrease 
A) lower; increase; decrease 
B) raise; decrease; increase 
C) lower; increase; increase 
D) raise; decrease; decrease 
E) raise; increase; decrease

Question 2

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________.

Accepted Answer

A) fall; falls 
B) do not change; rises 
C) fall; does not change 
D) fall; rises 
E) do not change; falls 
A) fall; falls 
B) do not change; rises 
C) fall; does not change 
D) fall; rises 
E) do not change; falls

Question 3

Needs-tested spending

Accepted Answer

A) increases in recessions and decreases in expansions. 
B) decreases in recessions and increases in expansions. 
C) does not change with the level of economic activity. 
D) is always increasing regardless of whether we are in an expansion or a recession. 
E) cannot be changed unless the government changes the spending laws. 
A) increases in recessions and decreases in expansions. 
B) decreases in recessions and increases in expansions. 
C) does not change with the level of economic activity. 
D) is always increasing regardless of whether we are in an expansion or a recession. 
E) cannot be changed unless the government changes the spending laws.

When there is a threat of inflation in the economy, the Fed can the federal funds rate so to aggregate demand and the price level.

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates and the exchange rate .

Needs-tested spending

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Filters

Exam 20: Fiscal Policy and Monetary Policy

When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so to ________ aggregate demand and ________ the price level.

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________.

Needs-tested spending

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Filters

When there is a threat of inflation in the economy, the Fed can the federal funds rate so to aggregate demand and the price level.

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates and the exchange rate .