Question 1

One problem with the ripple effect from the Fed's monetary policy is

Accepted Answer

A) the fact that the monetary policy transmission process is long and drawn out. 
B) that changing the Federal funds target rate seldom has an effect on the markets for reserves and loanable funds. 
C) that the Fed's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand. 
D) the tight relationship that the Federal funds rate has to aggregate spending. 
E) the frequent misalignment of the spread between the Federal funds rate and the Federal funds rate target. 
A) the fact that the monetary policy transmission process is long and drawn out. 
B) that changing the Federal funds target rate seldom has an effect on the markets for reserves and loanable funds. 
C) that the Fed's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand. 
D) the tight relationship that the Federal funds rate has to aggregate spending. 
E) the frequent misalignment of the spread between the Federal funds rate and the Federal funds rate target. A

Question 2

If the federal government has a budget deficit,then it is definitely the case that

Accepted Answer

A) the tax revenue exceed government outlays. 
B) the tax revenue and government outlays are equal. 
C) the tax revenue is falling and government outlays are rising. 
D) government outlays exceed tax revenue. 
E) the tax revenue is rising and government outlays are falling. 
A) the tax revenue exceed government outlays. 
B) the tax revenue and government outlays are equal. 
C) the tax revenue is falling and government outlays are rising. 
D) government outlays exceed tax revenue. 
E) the tax revenue is rising and government outlays are falling. D

Question 3

When the government's outlays equal its tax revenue,the budget

Accepted Answer

A) has a deficit and the national debt is increasing. 
B) is balanced and the national debt is not changing. 
C) has a surplus and the national debt is increasing. 
D) has a deficit and the national debt is decreasing. 
E) has a surplus and the national debt is decreasing. 
A) has a deficit and the national debt is increasing. 
B) is balanced and the national debt is not changing. 
C) has a surplus and the national debt is increasing. 
D) has a deficit and the national debt is decreasing. 
E) has a surplus and the national debt is decreasing. B

Question 4

An example of automatic fiscal policy is

Accepted Answer

A) an interest rate cut,initiated by an act of Congress. 
B) an increase in the quantity of money. 
C) a tax cut,initiated by an act of Congress. 
D) a decrease in tax revenues,triggered by the state of the economy. 
E) any change in the interest rate,regardless of its cause. 
A) an interest rate cut,initiated by an act of Congress. 
B) an increase in the quantity of money. 
C) a tax cut,initiated by an act of Congress. 
D) a decrease in tax revenues,triggered by the state of the economy. 
E) any change in the interest rate,regardless of its cause.

Question 5

The federal budget

Accepted Answer

A) is required to balance by law. 
B) can have a surplus but not a deficit. 
C) can have a deficit but not a surplus. 
D) can have a deficit or a surplus but cannot be balanced. 
E) can have a deficit,a surplus,or a balance. 
A) is required to balance by law. 
B) can have a surplus but not a deficit. 
C) can have a deficit but not a surplus. 
D) can have a deficit or a surplus but cannot be balanced. 
E) can have a deficit,a surplus,or a balance.

Question 6

"The federal budget is required by law to balance." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect bec

Question 7

"As long as supply-side effects are ignored,the balanced budget multiplier is equal to zero." Is the previous statement correct or incorrect? Define the balanced budget multiplier and then explain your answer.

Accepted Answer

The statement is incorrect because,even

Question 8

If there is an inflationary gap,what is the proper monetary policy to restore price stability? What actions can the Fed undertake to restore price stability?

Accepted Answer

An inflationary gap occurs when real GDP

Question 9

Needs-tested spending

Accepted Answer

A) increases as real GDP increases. 
B) increases as unemployment increases. 
C) decreases as unemployment increases. 
D) decreases in recession. 
E) makes recessions more severe. 
A) increases as real GDP increases. 
B) increases as unemployment increases. 
C) decreases as unemployment increases. 
D) decreases in recession. 
E) makes recessions more severe.

Question 10

In the United States for the year 2014,the federal government had a ________ so the national debt was ________.

Accepted Answer

A) budget deficit;increasing 
B) balanced budget;not changing 
C) budget surplus;decreasing 
D) budget deficit;decreasing 
E) budget surplus;increasing 
A) budget deficit;increasing 
B) balanced budget;not changing 
C) budget surplus;decreasing 
D) budget deficit;decreasing 
E) budget surplus;increasing

Question 11

"The Federal Open Market Committee (FOMC)is the group within the Federal Reserve that makes monetary policy decisions.The FOMC meets twice a year and each meeting lasts eight days." Are these two statements correct or incorrect? Why?

Accepted Answer

The first statement is correct.The secon

Question 12

Which of the following statements are correct?
I.Congress does not play a role in making monetary policy decisions.
Ii.The FOMC meets eight times a year to make monetary policy decisions.
Iii.The President of the United States appoints members and the Chairman of the Board of governors but has little other formal authority over monetary policy.

Accepted Answer

A) i,ii,and iii 
B) i,and ii 
C) ii only 
D) i and iii 
E) ii and iii 
A) i,ii,and iii 
B) i,and ii 
C) ii only 
D) i and iii 
E) ii and iii

Question 13

When tax revenues minus outlays is
I.positive,the government has a budget surplus.
Ii.negative,the government has a budget deficit.
Iii.zero,the government has a balanced budget.

Accepted Answer

A) i,ii,and iii 
B) i and ii only 
C) ii and iii only 
D) i only 
E) iii only 
A) i,ii,and iii 
B) i and ii only 
C) ii and iii only 
D) i only 
E) iii only

Question 14

Discretionary fiscal policy is handicapped by

Accepted Answer

A) lawmaking time lags,induced taxes,and automatic stabilizers. 
B) lawmaking time lags,estimation of potential GDP,and economic forecasting. 
C) economic forecasting,lawmaking time lags,and induced taxes. 
D) automatic stabilizers,lawmaking time lags,and potential GDP estimation. 
E) automatic stabilizers,the multipliers,and potential GDP estimation. 
A) lawmaking time lags,induced taxes,and automatic stabilizers. 
B) lawmaking time lags,estimation of potential GDP,and economic forecasting. 
C) economic forecasting,lawmaking time lags,and induced taxes. 
D) automatic stabilizers,lawmaking time lags,and potential GDP estimation. 
E) automatic stabilizers,the multipliers,and potential GDP estimation.

Question 15

Taxes that change with the level of real GDP and income are called

Accepted Answer

A) voluntary taxes. 
B) GDP taxes. 
C) induced taxes. 
D) forced taxes. 
E) flexible taxes. 
A) voluntary taxes. 
B) GDP taxes. 
C) induced taxes. 
D) forced taxes. 
E) flexible taxes.

Question 16

Ignoring any supply-side effects,how does the magnitude of the government expenditure multiplier compare to the magnitude of the tax multiplier? Explain your answer.

Accepted Answer

The magnitude of the government expendit

Question 17

Which of the following is an example of a fiscal stimulus?

Accepted Answer

A) decrease in government expenditure on goods and services 
B) decrease in transfer payments 
C) increase in taxes 
D) decrease in taxes 
E) none of the above 
A) decrease in government expenditure on goods and services 
B) decrease in transfer payments 
C) increase in taxes 
D) decrease in taxes 
E) none of the above

Question 18

Discretionary fiscal policy is defined as fiscal policy

Accepted Answer

A) left to the discretion of military authorities. 
B) initiated by an act of Congress. 
C) initiated by a Presidential proclamation. 
D) triggered by the state of the economy. 
E) with multiplier effects. 
A) left to the discretion of military authorities. 
B) initiated by an act of Congress. 
C) initiated by a Presidential proclamation. 
D) triggered by the state of the economy. 
E) with multiplier effects.

Question 19

When tax revenues equal government outlays,the situation is referred to as

Accepted Answer

A) a balanced budget. 
B) an equivalent budget. 
C) an equal budget. 
D) an equilibrium budget. 
E) a legal budget. 
A) a balanced budget. 
B) an equivalent budget. 
C) an equal budget. 
D) an equilibrium budget. 
E) a legal budget.

Question 20

The Fed increases the quantity of money to counteract

Accepted Answer

A) a recessionary gap. 
B) a federal budget surplus. 
C) negative net exports. 
D) an inflationary gap. 
E) inflation. 
A) a recessionary gap. 
B) a federal budget surplus. 
C) negative net exports. 
D) an inflationary gap. 
E) inflation.

One problem with the ripple effect from the Fed's monetary policy is

If the federal government has a budget deficit,then it is definitely the case that

When the government's outlays equal its tax revenue,the budget

An example of automatic fiscal policy is

The federal budget

"The federal budget is required by law to balance." Is the previous statement correct or incorrect?

"As long as supply-side effects are ignored,the balanced budget multiplier is equal to zero." Is the previous statement correct or incorrect? Define the balanced budget multiplier and then explain your answer.

If there is an inflationary gap,what is the proper monetary policy to restore price stability? What actions can the Fed undertake to restore price stability?

Needs-tested spending

In the United States for the year 2014,the federal government had a so the national debt was .

"The Federal Open Market Committee (FOMC)is the group within the Federal Reserve that makes monetary policy decisions.The FOMC meets twice a year and each meeting lasts eight days." Are these two statements correct or incorrect? Why?

When tax revenues minus outlays is I.positive,the government has a budget surplus. Ii.negative,the government has a budget deficit. Iii.zero,the government has a balanced budget.

Discretionary fiscal policy is handicapped by

Taxes that change with the level of real GDP and income are called

Ignoring any supply-side effects,how does the magnitude of the government expenditure multiplier compare to the magnitude of the tax multiplier? Explain your answer.

Which of the following is an example of a fiscal stimulus?

Discretionary fiscal policy is defined as fiscal policy

When tax revenues equal government outlays,the situation is referred to as

The Fed increases the quantity of money to counteract

Getting Started

The Usand 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

One problem with the ripple effect from the Fed's monetary policy is

If the federal government has a budget deficit,then it is definitely the case that

When the government's outlays equal its tax revenue,the budget

An example of automatic fiscal policy is

The federal budget

"The federal budget is required by law to balance." Is the previous statement correct or incorrect?

"As long as supply-side effects are ignored,the balanced budget multiplier is equal to zero." Is the previous statement correct or incorrect? Define the balanced budget multiplier and then explain your answer.

If there is an inflationary gap,what is the proper monetary policy to restore price stability? What actions can the Fed undertake to restore price stability?

Needs-tested spending

In the United States for the year 2014,the federal government had a ________ so the national debt was ________.

"The Federal Open Market Committee (FOMC)is the group within the Federal Reserve that makes monetary policy decisions.The FOMC meets twice a year and each meeting lasts eight days." Are these two statements correct or incorrect? Why?

When tax revenues minus outlays is I.positive,the government has a budget surplus. Ii.negative,the government has a budget deficit. Iii.zero,the government has a balanced budget.

Discretionary fiscal policy is handicapped by

Taxes that change with the level of real GDP and income are called

Ignoring any supply-side effects,how does the magnitude of the government expenditure multiplier compare to the magnitude of the tax multiplier? Explain your answer.

Which of the following is an example of a fiscal stimulus?

Discretionary fiscal policy is defined as fiscal policy

When tax revenues equal government outlays,the situation is referred to as

The Fed increases the quantity of money to counteract

Getting Started

The Usand 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

In the United States for the year 2014,the federal government had a so the national debt was .