Week 5 Reading Quiz Chs. 15 and 17

A  By only increasing taxes

B  Lowering taxes and raising government spending

C  Increasing government spending and/or decreasing taxes

D  Decreasing government spending and/or 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 unemployment rate is declining.

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

D  The rate of inflation is declining.

A  Congress

B  The President and Congress

C  The President

D  State Legislatures

A  Excessive importation of goods and services

B  Private consumption

C  Foreign firms dominating the domestic economy

D  Government borrowing and spending

A  Increasing investment and increasing government spending

B  Decreasing in government spending and increasing in taxes

C  Increasing consumption and decreasing taxes

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

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

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

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  Automatic stabilizers; current retirees using funds from current contributions

A  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.

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 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.

A  Unemployment Insurance

B  Food Stamps

C  Stimulus Package

D  Personal Income Tax

A  Neither monetary or fiscal policy

B  Fiscal but not monetary policy

C  Monetary but not fiscal policy

D  Both monetary and fiscal policy

A  Decrease aggregate demand

B  Increase aggregate supply

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  $400 billion

D  $200 million

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  The president

B  Member banks

C  U. S. Congress

D  Board of Governors of the Fed

A  Raise interest rates

B  Sell off government bonds

C  Issue more loans

A  Discount rate

B  Reserve requirements

C  Open market operations

D  Federal funds rate

A  Lower interest rates and higher GDP

B  Higher interest rates and lower GDP

C  Higher interest rates and higher GDP

D  Lower interest rates and lower GDP.

A  Increasing the discount rate

B  Purchasing government securities

C  Selling government securities

D  Lending to nonbanks