Week 5 Reading Quiz Chs. 15 and 17

A  Increasing government spending and/or decreasing taxes

B  By only increasing taxes

C  Decreasing government spending and/or increasing taxes

D  Lowering taxes and raising government spending

A  Contractionary monetary policy

B  Expansionary monetary policy

C  Contractionary fiscal policy

D  Expansionary fiscal 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 unemployment rate is declining.

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

A  The President and Congress

B  The President

C  State Legislatures

D  Congress

A  Foreign firms dominating the domestic economy

B  Private consumption

C  Excessive importation of goods and services

D  Government borrowing and spending

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

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

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

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

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 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  Stimulus Package

B  Food Stamps

C  Personal Income Tax

D  Unemployment Insurance

A  Fiscal but not monetary policy

B  Neither monetary or fiscal policy

C  Monetary but not fiscal policy

D  Both monetary and 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 million

B  $400 billion

C  $200 billion

D  $200 million

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

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

C  There are 14 members of the Federal Reserve Board

D  There are 12 regional Federal Reserve Banks

A  The president

B  Member banks

C  Board of Governors of the Fed

D  U. S. Congress

A  Issue more loans

B  Sell off government bonds

C  Raise interest rates

A  Open market operations

B  Reserve requirements

C  Discount rate

D  Federal funds rate

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  Lending to nonbanks

B  Increasing the discount rate

C  Selling government securities

D  Purchasing government securities