Week 5 Reading Quiz Chs. 15 and 17

A  Decreasing government spending and/or increasing taxes

B  Lowering taxes and raising government spending

C  Increasing government spending and/or decreasing taxes

D  By only increasing taxes

A  Contractionary monetary policy

B  Expansionary fiscal policy

C  Contractionary fiscal policy

D  Expansionary monetary policy

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

B  The rate of inflation is declining.

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

D  The unemployment rate is declining.

A  The President

B  State Legislatures

C  Congress

D  The President and Congress

A  Private consumption

B  Government borrowing and spending

C  Excessive importation of goods and services

D  Foreign firms dominating the domestic economy

A  Decreasing in government spending and decreasing taxes

B  Increasing consumption and decreasing taxes

C  Decreasing in government spending and increasing in taxes

D  Increasing investment and increasing government spending

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

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

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

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

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

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

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

D  Automatic stabilizers; current retirees using funds from current contributions

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

B  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.

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  Food Stamps

C  Stimulus Package

D  Unemployment Insurance

A  Both monetary and fiscal policy

B  Monetary but not fiscal policy

C  Neither monetary or fiscal policy

D  Fiscal but not monetary policy

A  Decrease aggregate supply

B  Increase aggregate demand

C  Decrease aggregate demand

D  Increase aggregate supply

A  There is no change

B  It doubles

C  It increases

D  It decreases

A  $200 million

B  $200 billion

C  $400 billion

D  $400 million

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

B  There are 12 regional Federal Reserve Banks

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

D  There are 14 members of the Federal Reserve Board

A  Member banks

B  U. S. Congress

C  Board of Governors of the Fed

D  The president

A  Sell off government bonds

B  Issue more loans

C  Raise interest rates

A  Reserve requirements

B  Open market operations

C  Discount rate

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  Lending to nonbanks

B  Purchasing government securities

C  Increasing the discount rate

D  Selling government securities