Question 1

Over time,the Phillips curve has

Accepted Answer

A) remained stable. 
B) shifted downward. 
C) shifted upward. 
D) has become positively sloped. 
A) remained stable. 
B) shifted downward. 
C) shifted upward. 
D) has become positively sloped.

Question 2

Alan Greenspan's overall approach to monetary policy

Accepted Answer

A) has been credited in part for the expansion of the 1990s. 
B) relied heavily on the monetization of debt during economic downturns. 
C) typically responded to economic downturns by lowering the federal funds rate. 
D) Both a and b are correct. 
E)  both a and c are correct. 
A) has been credited in part for the expansion of the 1990s. 
B) relied heavily on the monetization of debt during economic downturns. 
C) typically responded to economic downturns by lowering the federal funds rate. 
D) Both a and b are correct. 
E)  both a and c are correct.

Question 3

Robert Lucas and his followers have argued that the Philips curve appears to be

Accepted Answer

A) a vertical line. 
B) a horizontal line. 
C) a negatively-sloped curve. 
D) a positively-sloped curve. 
A) a vertical line. 
B) a horizontal line. 
C) a negatively-sloped curve. 
D) a positively-sloped curve.

Question 4

The belief that government spending is necessary to offset sluggish private investment demand is associated with

Accepted Answer

A) monetarism. 
B) supply-side economics. 
C) Keynesianism. 
D) rational expectations theory. 
A) monetarism. 
B) supply-side economics. 
C) Keynesianism. 
D) rational expectations theory.

Question 5

Fiscal policy aims to influence the overall health of the economy through changes in

Accepted Answer

A) the money supply. 
B) government spending and tax rates. 
C) interest rates. 
D) international exchange rates. 
E)  All of the above. 
A) the money supply. 
B) government spending and tax rates. 
C) interest rates. 
D) international exchange rates. 
E)  All of the above.

Question 6

Stagflation is defined as

Accepted Answer

A) the simultaneous occurrence of high inflation and high unemployment. 
B) high inflation accompanied by falling interest rates. 
C) declining GDP accompanied by a stable price level. 
D) a persistent decline in the price level that is unresponsive to monetary and fiscal policies. 
A) the simultaneous occurrence of high inflation and high unemployment. 
B) high inflation accompanied by falling interest rates. 
C) declining GDP accompanied by a stable price level. 
D) a persistent decline in the price level that is unresponsive to monetary and fiscal policies.

Question 7

The housing market of the early to mid 2000s did not feature

Accepted Answer

A) "teaser rates" on home mortgages. 
B) a dramatic rise in housing prices. 
C) widespread calls to end "predatory" lending practices. 
D) "subprime" mortgages. 
A) "teaser rates" on home mortgages. 
B) a dramatic rise in housing prices. 
C) widespread calls to end "predatory" lending practices. 
D) "subprime" mortgages.

Question 8

The Bretton Woods system

Accepted Answer

A) allowed for market-determined exchange rates. 
B) ended the use of the gold standard in all participating countries. 
C) led to a dramatic increase in the U.S.balance of payments deficit. 
D) resulted in the rapid increase of the U.S.gold supply in the 1960s. 
E)  All of the above. 
A) allowed for market-determined exchange rates. 
B) ended the use of the gold standard in all participating countries. 
C) led to a dramatic increase in the U.S.balance of payments deficit. 
D) resulted in the rapid increase of the U.S.gold supply in the 1960s. 
E)  All of the above.

Question 9

Which of the following economists is often credited with establishing the monetarist school of thought?

Accepted Answer

A) John Maynard Keynes 
B) Arthur Laffer 
C) A.W.Phillips 
D) Milton Friedman 
A) John Maynard Keynes 
B) Arthur Laffer 
C) A.W.Phillips 
D) Milton Friedman

Question 10

The Reagan administration's experiment with supply-side economics produced a historic period of economic expansion that was accompanied by

Accepted Answer

A) falling real interest rates. 
B) high unemployment rates. 
C) a dramatic increase in the federal government's budget deficit. 
D) a reduction in the U.S.trade deficit. 
E)  All of the above. 
A) falling real interest rates. 
B) high unemployment rates. 
C) a dramatic increase in the federal government's budget deficit. 
D) a reduction in the U.S.trade deficit. 
E)  All of the above.

Question 11

According to the Fisher effect,if a lender and a borrower would agree on an interest rate of 8 percent when no inflation is expected,they should set a rate of _______ when an inflation rate of 3 percent is expected.

Accepted Answer

A) 2 percent 
B) 5 percent 
C) 8 percent 
D) 11 percent 
A) 2 percent 
B) 5 percent 
C) 8 percent 
D) 11 percent

Question 12

Under the leadership of Federal Reserve Chairman _______________,the double-digit inflation of the 1970s and early 1980s was finally reduced using policies advocated by monetarists.

Accepted Answer

A) Milton Friedman 
B) Alan Greenspan 
C) Paul Volcker 
D) Alfred Kahn 
A) Milton Friedman 
B) Alan Greenspan 
C) Paul Volcker 
D) Alfred Kahn

Question 13

The economic boom of the 1990s was caused in part by

Accepted Answer

A) America "getting wired." 
B) low interest rates. 
C) an investment boom as the use of personal computers and the Internet became ubiquitous. 
D) All of the above are correct. 
E)  Only a and c are correct. 
A) America "getting wired." 
B) low interest rates. 
C) an investment boom as the use of personal computers and the Internet became ubiquitous. 
D) All of the above are correct. 
E)  Only a and c are correct.

Exam 27: Government the Business Cycle After World War II

Over time,the Phillips curve has

Alan Greenspan's overall approach to monetary policy

Robert Lucas and his followers have argued that the Philips curve appears to be

The belief that government spending is necessary to offset sluggish private investment demand is associated with

Fiscal policy aims to influence the overall health of the economy through changes in

Stagflation is defined as

The housing market of the early to mid 2000s did not feature

The Bretton Woods system

Which of the following economists is often credited with establishing the monetarist school of thought?

The Reagan administration's experiment with supply-side economics produced a historic period of economic expansion that was accompanied by

According to the Fisher effect,if a lender and a borrower would agree on an interest rate of 8 percent when no inflation is expected,they should set a rate of _______ when an inflation rate of 3 percent is expected.

Under the leadership of Federal Reserve Chairman _______________,the double-digit inflation of the 1970s and early 1980s was finally reduced using policies advocated by monetarists.

The economic boom of the 1990s was caused in part by

Economic History

Founding the Colonies

Colonial Economic Activities

The Economic Relations of the Colonies

Economic Progress and Wealth

Three Crises and Revolt

Hard Realities for a New Nation

Land and the Early Western Movements

Transportation and Market Growth

Market Expansion Industry in First Transition

Labor During the Early Industrial Period

Money and Banking in the Developing Economy

The Entrenchment of Slavery and Regional Conflict

War, Recovery and Regional Divergence

Agricultures Western Advance

Railroads and Economic Change

Industrial Expansion and Concentration

The Emergence of Americas Labor Consciousness

Money, Prices, and Finance in the Postbellum ERA

Commerce at Home and Abroad

Mobilizing for War

The Roaring Twenties

The Great Depression

The New Deal

World War II

The Changing Role of the Federal Government

Manufacturing, Productivity, and Labor

Achievements of the Past, Challenges for the Future

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