Week 5 Reading Quiz Chs. 15 and 17

A  By only increasing taxes

B  Decreasing government spending and/or increasing taxes

C  Increasing government spending and/or decreasing taxes

D  Lowering taxes and raising government spending

A  Expansionary monetary policy

B  Contractionary fiscal policy

C  Contractionary monetary policy

D  Expansionary fiscal policy

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

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

C  The unemployment rate is declining.

D  The rate of inflation is declining.

A  The President and Congress

B  The President

C  Congress

D  State Legislatures

A  Excessive importation of goods and services

B  Foreign firms dominating the domestic economy

C  Private consumption

D  Government borrowing and spending

A  Increasing investment and increasing government spending

B  Increasing consumption and decreasing taxes

C  Decreasing in government spending and increasing in taxes

D  Decreasing in government spending and decreasing taxes

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

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

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

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

A  Automatic stabilizers; current retirees using funds from current contributions

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

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

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

A  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.

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

C  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.

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  Unemployment Insurance

B  Personal Income Tax

C  Food Stamps

D  Stimulus Package

A  Fiscal but not monetary policy

B  Monetary but not fiscal policy

C  Both monetary and fiscal policy

D  Neither monetary or fiscal policy

A  Increase aggregate supply

B  Decrease aggregate supply

C  Decrease aggregate demand

D  Increase aggregate demand

A  It decreases

B  It increases

C  It doubles

D  There is no change

A  $200 billion

B  $400 million

C  $200 million

D  $400 billion

A  There are 14 members of the Federal Reserve Board

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

C  There are 12 regional Federal Reserve Banks

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

A  Member banks

B  The president

C  U. S. Congress

D  Board of Governors of the Fed

A  Sell off government bonds

B  Raise interest rates

C  Issue more loans

A  Federal funds rate

B  Open market operations

C  Reserve requirements

D  Discount rate

A  Higher interest rates and higher GDP

B  Higher interest rates and lower GDP

C  Lower interest rates and lower GDP.

D  Lower interest rates and higher GDP

A  Increasing the discount rate

B  Selling government securities

C  Purchasing government securities

D  Lending to nonbanks