Week 5 Reading Quiz Chs. 15 and 17

A  Lowering taxes and raising government spending

B  Increasing government spending and/or decreasing taxes

C  Decreasing government spending and/or increasing taxes

D  By only increasing taxes

A  Contractionary monetary policy

B  Expansionary monetary policy

C  Contractionary fiscal policy

D  Expansionary fiscal policy

A  The rate of inflation is declining.

B  The unemployment rate is declining.

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

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

A  Congress

B  The President and Congress

C  State Legislatures

D  The President

A  Foreign firms dominating the domestic economy

B  Excessive importation of goods and services

C  Private consumption

D  Government borrowing and spending

A  Decreasing in government spending and increasing in taxes

B  Increasing consumption and decreasing taxes

C  Decreasing in government spending and decreasing taxes

D  Increasing investment and increasing government spending

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

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

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

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  Automatic stabilizers; current retirees using funds from current contributions

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

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 this mandate cannot be added to the Constitution, and therefore, could not be enforced.

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 sometimes it is necessary or beneficial to run large budget deficits in the short-run.

A  Personal Income Tax

B  Unemployment Insurance

C  Stimulus Package

D  Food Stamps

A  Both monetary and fiscal policy

B  Monetary but not fiscal policy

C  Fiscal but not monetary policy

D  Neither monetary or fiscal policy

A  Decrease aggregate supply

B  Decrease aggregate demand

C  Increase aggregate demand

D  Increase aggregate supply

A  It doubles

B  It decreases

C  It increases

D  There is no change

A  $400 billion

B  $400 million

C  $200 million

D  $200 billion

A  There are 14 members of the Federal Reserve Board

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

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

D  There are 12 regional Federal Reserve Banks

A  Member banks

B  Board of Governors of the Fed

C  The president

D  U. S. Congress

A  Issue more loans

B  Raise interest rates

C  Sell off government bonds

A  Discount rate

B  Reserve requirements

C  Open market operations

D  Federal funds rate

A  Lower interest rates and lower GDP.

B  Higher interest rates and lower GDP

C  Higher interest rates and higher GDP

D  Lower interest rates and higher GDP

A  Purchasing government securities

B  Selling government securities

C  Increasing the discount rate

D  Lending to nonbanks