Week 5 Reading Quiz Chs. 15 and 17

A  Lowering taxes and raising government spending

B  Increasing government spending and/or decreasing taxes

C  By only increasing taxes

D  Decreasing government spending and/or increasing taxes

A  Expansionary fiscal policy

B  Contractionary monetary policy

C  Expansionary monetary policy

D  Contractionary fiscal policy

A  The rate of inflation is declining.

B  The unemployment rate is declining.

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

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

A  The President

B  State Legislatures

C  The President and Congress

D  Congress

A  Government borrowing and spending

B  Excessive importation of goods and services

C  Private consumption

D  Foreign firms dominating the domestic economy

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

A  Automatic stabilizers; current retirees using funds from current contributions

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

C  Progressive tax; to current retirees from funds from their past 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 the government does not have macroeconomic responsibilities

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

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  Food Stamps

B  Personal Income Tax

C  Stimulus Package

D  Unemployment Insurance

A  Both monetary and fiscal policy

B  Fiscal but not monetary policy

C  Neither monetary or fiscal policy

D  Monetary but not fiscal policy

A  Increase aggregate supply

B  Decrease aggregate supply

C  Increase aggregate demand

D  Decrease aggregate demand

A  It doubles

B  It increases

C  There is no change

D  It decreases

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  There are 12 regional Federal Reserve Banks

C  There are 14 members of the Federal Reserve Board

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

A  The president

B  Member banks

C  U. S. Congress

D  Board of Governors of the Fed

A  Sell off government bonds

B  Issue more loans

C  Raise interest rates

A  Open market operations

B  Reserve requirements

C  Federal funds rate

D  Discount rate

A  Higher interest rates and higher GDP

B  Lower interest rates and lower GDP.

C  Higher 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