Week 5 Reading Quiz Chs. 15 and 17

A  Lowering taxes and raising government spending

B  Decreasing government spending and/or increasing taxes

C  By only increasing taxes

D  Increasing government spending and/or decreasing taxes

A  Expansionary monetary policy

B  Expansionary fiscal policy

C  Contractionary monetary policy

D  Contractionary fiscal policy

A  The government is spending more money than it receives in taxes for a given year.

B  The unemployment rate is declining.

C  The rate of inflation is declining.

D  The government is receiving more money in taxes than it spends in a year.

A  Congress

B  The President

C  The President and Congress

D  State Legislatures

A  Private consumption

B  Government borrowing and spending

C  Foreign firms dominating the domestic economy

D  Excessive importation of goods and services

A  Increasing consumption and decreasing taxes

B  Decreasing in government spending and increasing in taxes

C  Decreasing in government spending and decreasing taxes

D  Increasing investment and increasing government spending

A  Increase taxes, increase spending, and/or increase transfer payments

B  Decrease taxes, decrease government spending, and/or decrease transfer payments

C  Increase taxes, decrease transfer payments, and/or decrease government spending.

D  Decrease taxes, increase transfer payments, and/or decrease government spending

A  Progressive tax; to current retirees from funds from their past contributions

B  Legislative lag; deducted from the higher-income groups to pay the lower income groups

C  Contractionary fiscal policy; current older workers from funds deducted from younger workers

D  Automatic stabilizers; current retirees using funds from current contributions

A  One argument in support of a required balanced federal budget maintains that having a balanced budget each year would make the impacts of economic recessions less severe.

B  One argument against a required balanced federal budget is that sometimes it is necessary or beneficial to run large budget deficits in the short-run.

C  One argument against a required balanced federal budget is that the government does not have macroeconomic responsibilities

D  One argument against a required balanced federal budget is that this mandate cannot be added to the Constitution, and therefore, could not be enforced.

A  Personal Income Tax

B  Unemployment Insurance

C  Food Stamps

D  Stimulus Package

A  Monetary but not fiscal policy

B  Both monetary and fiscal policy

C  Fiscal but not monetary policy

D  Neither monetary or fiscal policy

A  Increase aggregate demand

B  Increase aggregate supply

C  Decrease aggregate demand

D  Decrease aggregate supply

A  There is no change

B  It increases

C  It doubles

D  It decreases

A  $200 billion

B  $200 million

C  $400 million

D  $400 billion

A  There are 14 members of the Federal Reserve Board

B  The head of the Treasury also chairs the Federal Reserve Board

C  There are 12 regional Federal Reserve Banks

D  The FOMC is smaller in size than the Federal Reserve Board

A  The president

B  Board of Governors of the Fed

C  U. S. Congress

D  Member banks

A  Sell off government bonds

B  Raise interest rates

C  Issue more loans

A  Federal funds rate

B  Open market operations

C  Discount rate

D  Reserve requirements

A  Higher interest rates and higher GDP

B  Higher interest rates and lower GDP

C  Lower interest rates and higher GDP

D  Lower interest rates and lower GDP.

A  Selling government securities

B  Lending to nonbanks

C  Purchasing government securities

D  Increasing the discount rate