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  Contractionary fiscal policy

B  Expansionary monetary policy

C  Expansionary fiscal policy

D  Contractionary monetary policy

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

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

C  The rate of inflation is declining.

D  The unemployment rate is declining.

A  State Legislatures

B  The President

C  The President and Congress

D  Congress

A  Foreign firms dominating the domestic economy

B  Excessive importation of goods and services

C  Government borrowing and spending

D  Private consumption

A  Decreasing in government spending and decreasing taxes

B  Increasing investment and increasing government spending

C  Decreasing in government spending and increasing in taxes

D  Increasing consumption and decreasing taxes

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

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

C  Automatic stabilizers; current retirees using funds from current contributions

D  Progressive tax; to current retirees from funds from their past 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  Food Stamps

B  Unemployment Insurance

C  Personal Income Tax

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 demand

C  Decrease aggregate supply

D  Increase aggregate demand

A  It decreases

B  There is no change

C  It doubles

D  It increases

A  $400 million

B  $200 billion

C  $200 million

D  $400 billion

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

B  There are 14 members of the Federal Reserve Board

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

D  There are 12 regional Federal Reserve Banks

A  The president

B  Board of Governors of the Fed

C  U. S. Congress

D  Member banks

A  Issue more loans

B  Sell off government bonds

C  Raise interest rates

A  Reserve requirements

B  Discount rate

C  Open market operations

D  Federal funds rate

A  Lower interest rates and lower GDP.

B  Lower interest rates and higher GDP

C  Higher interest rates and lower GDP

D  Higher interest rates and higher GDP

A  Increasing the discount rate

B  Lending to nonbanks

C  Purchasing government securities

D  Selling government securities