Economics

If elected officials prefer policy actions that make benefits available quickly while deferring cost

If elected officials prefer policy actions that make benefits available quickly while deferring cost

If elected officials prefer policy actions that make benefits available quickly while deferring costs, they will be inclined to favor
A) an easier monetary policy to counter recession.
B) increased appropriations to provide jobs for unemplo

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According to your textbook, Keynesian economic theory

According to your textbook, Keynesian economic theory

According to your textbook, Keynesian economic theory
A) argues that federal budget deficits were necessary during periods of rapid economic growth.
B) questioned the use of the federal budget deficit as a policy tool to manipulate and fine

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Your textbook asserts that the federal government's $787 billion stimulus plan, launched in 2009,

Your textbook asserts that the federal government's $787 billion stimulus plan, launched in 2009,

Your textbook asserts that the federal government's $787 billion stimulus plan, launched in 2009,
A) failed to stimulate the economy out of the Great Recession.
B) was followed by growing unemployment.
C) stifled the corrective pr

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Fill in the blank: The U.S. had ________ throughout the past 10 years.

Fill in the blank: The U.S. had ________ throughout the past 10 years.

Fill in the blank: The U.S. had ________ throughout the past 10 years.
A) balanced budgets
B) budget deficits
C) budget surpluses
D) no budget policy

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Of the following, pick the year the U.S. enjoyed a budget surplus.

Of the following, pick the year the U.S. enjoyed a budget surplus.

Of the following, pick the year the U.S. enjoyed a budget surplus.
A) 1970
B) 1980
C) 1990
D) 2000
E) 2010

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What, according to the textbook, accounts for the federal budget surplus in the late 1990s?

What, according to the textbook, accounts for the federal budget surplus in the late 1990s?

What, according to the textbook, accounts for the federal budget surplus in the late 1990s?
A) A move toward virtue on Capital Hill
B) Strong economic growth during that period
C) Huge increases in tax rates
D) A successful beggar

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Roughly how many times has the U.S. experienced a budget surplus since 1960?

Roughly how many times has the U.S. experienced a budget surplus since 1960?

Roughly how many times has the U.S. experienced a budget surplus since 1960?
A) 0
B) 5
C) 10
D) 20
E) 30

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The federal government budget has generally been in a deficit for the past several decades becauseA)

The federal government budget has generally been in a deficit for the past several decades becauseA)

The federal government budget has generally been in a deficit for the past several decades because
A) budget deficits promote full employment.
B) every year during those decades was a recession year in which expansionary fiscal policy was c

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Keynesian analysis may have contributed to chronic federal budget deficits by

Keynesian analysis may have contributed to chronic federal budget deficits by

Keynesian analysis may have contributed to chronic federal budget deficits by
A) advocating transfer payments to redistribute income.
B) persuading the public that any given deficit could be a result of responsible policy decisions.
C)

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Fill in the blanks: Elected government officials ________ support ________ fiscal policies.

Fill in the blanks: Elected government officials ________ support ________ fiscal policies.

Fill in the blanks: Elected government officials ________ support ________ fiscal policies.
A) must; contractionary
B) tend to; expansionary
C) must; expansionary
D) tend to; contractionary

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According to economic theory, elected government officials will favor

According to economic theory, elected government officials will favor

According to economic theory, elected government officials will favor
A) federal budget surpluses.
B) balanced federal budgets.
C) federal budget deficits.
D) shrinking federal budgets.

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The democratic political process operating at the national level tends to result in

The democratic political process operating at the national level tends to result in

The democratic political process operating at the national level tends to result in
A) balanced budgets.
B) deficits.
C) surpluses.
D) surpluses alternating with deficits in a countercyclical manner.

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According to economic theory, state governments

According to economic theory, state governments

According to economic theory, state governments
A) will be biased toward chronic budget deficits.
B) will act in the public interest.
C) will act in the national interest.
D) will do all of the above.
E) will do none of the a

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If the U.S. government can run chronic budget deficits, why can't state governments do the same?

If the U.S. government can run chronic budget deficits, why can't state governments do the same?

If the U.S. government can run chronic budget deficits, why can't state governments do the same?
A) Conservatives have more power in state legislatures than in the U.S. Congress.
B) Voters do not believe in budget deficits and they con

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Fill in the blanks: Elected government officials ________ support ________ monetary policies.

Fill in the blanks: Elected government officials ________ support ________ monetary policies.

Fill in the blanks: Elected government officials ________ support ________ monetary policies.
A) always; contractionary
B) tend to; expansionary
C) always; expansionary
D) tend to; contractionary

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According to economic theory, the democratic political processes tend to produce

According to economic theory, the democratic political processes tend to produce

According to economic theory, the democratic political processes tend to produce
A) unstable aggregate demand policies with a bias toward expansion.
B) unstable aggregate demand policies with a bias toward contraction.
C) stable aggreg

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According to the economic way of thinking, elected government officials tend to favor

According to the economic way of thinking, elected government officials tend to favor

According to the economic way of thinking, elected government officials tend to favor
A) contractionary monetary policies.
B) contractionary fiscal policies.
C) expansionary monetary and fiscal policies.
D) monetary and fiscal pol

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The economic theory of government predicts elected officials at the federal level will have incentiv

The economic theory of government predicts elected officials at the federal level will have incentiv

The economic theory of government predicts elected officials at the federal level will have incentives to act in ways that
A) cause inflation.
B) increase uncertainty and the instability of total demand.
C) secure short-term economic g

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The democratic political process is weighted in a manner that favors

The democratic political process is weighted in a manner that favors

The democratic political process is weighted in a manner that favors
A) contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect output before they affect the price level.
B) contracti

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Elected government officials seem biased toward favoring

Elected government officials seem biased toward favoring

Elected government officials seem biased toward favoring
A) the national interest.
B) the global interest.
C) well organized, special interest groups.
D) policies that are in the long-run interest of economists.

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According to the economic way of thinking, government officials tend to vote on legislation that

According to the economic way of thinking, government officials tend to vote on legislation that

According to the economic way of thinking, government officials tend to vote on legislation that
A) concentrates benefits on a well-organized group.
B) disperses costs throughout a great number of politically unorganized people.
C) gen

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According to the economic theory of government, policies in a democracy will favor

According to the economic theory of government, policies in a democracy will favor

According to the economic theory of government, policies in a democracy will favor
A) the interests of many small minorities.
B) the public interest.
C) the real interests of the majority.
D) whatever the majority thinks it wants

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Legislators facing a close electoral contest will tend to favor

Legislators facing a close electoral contest will tend to favor

Legislators facing a close electoral contest will tend to favor
A) policies with benefits greater than costs for everyone.
B) policies with benefits greater than costs for the majority.
C) policies with benefits in the near future and

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The stabilization policies of government are most likely to promote

The stabilization policies of government are most likely to promote

The stabilization policies of government are most likely to promote
A) high employment.
B) price stability.
C) reduced aggregate fluctuations.
D) the interests of those who plan and execute them.
E) the interests of the major

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Attempts to fine-tune the economy through counter-cyclical monetary policy

Attempts to fine-tune the economy through counter-cyclical monetary policy

Attempts to fine-tune the economy through counter-cyclical monetary policy
A) demonstrated their effectiveness in the 1930s.
B) demonstrated their effectiveness during World War II.
C) demonstrated their effectiveness between 1945 and

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Does the experience of World War II demonstrate that government budget deficits and surpluses can be

Does the experience of World War II demonstrate that government budget deficits and surpluses can be

Does the experience of World War II demonstrate that government budget deficits and surpluses can be used to stabilize aggregate demand?
A) No, because the deficits run during the 1930s did not end the recession.
B) No, because the fact tha

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Which of the following would likely take the longest time to enact?

Which of the following would likely take the longest time to enact?

Which of the following would likely take the longest time to enact?
A) Federal government fiscal policy that strives for a balanced budget
B) The Fed's lowering of the discount rate
C) The Fed's raising of the discount rate

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The relative quickness with which the Open Market Committee can respond to changes in economic indic

The relative quickness with which the Open Market Committee can respond to changes in economic indic

The relative quickness with which the Open Market Committee can respond to changes in economic indicators leads the Fed to
A) control precisely the growth rate of the money stock.
B) control precisely the growth rate of total spending.

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If Congress authorized the President to lower tax rates or to initiate spending projects when aggreg

If Congress authorized the President to lower tax rates or to initiate spending projects when aggreg

If Congress authorized the President to lower tax rates or to initiate spending projects when aggregate demand was inadequate, which consequence could be predicted most confidently?
A) Aggregate spending would be more stable over time.
B) R

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In order to move aggregate demand to the level consistent with full employment by means of fiscal po

In order to move aggregate demand to the level consistent with full employment by means of fiscal po

In order to move aggregate demand to the level consistent with full employment by means of fiscal policy, government officials who set the budget must know
A) the current level of aggregate demand.
B) the level of aggregate demand that woul

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Does monetary policy require the accompaniment of fiscal policy to change total spending?

Does monetary policy require the accompaniment of fiscal policy to change total spending?

Does monetary policy require the accompaniment of fiscal policy to change total spending?
A) No, because the Fed is an independent agency of the federal government.
B) Yes, because monetary policy can contract total spending but cannot by i

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Does fiscal policy affect monetary policy?

Does fiscal policy affect monetary policy?

Does fiscal policy affect monetary policy?
A) No, because real output and income can and sometimes do move in the opposite direction from nominal money output and income.
B) Yes, because the Fed and the Treasury naturally tend to pursue sim

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We do not have reliable information on the time lags between expansionary fiscal and monetary policy

We do not have reliable information on the time lags between expansionary fiscal and monetary policy

We do not have reliable information on the time lags between expansionary fiscal and monetary policy actions and their effect on production and prices because
A) Congress has reduced the funds available to the Bureau of Economic Analysis.
B

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The time it takes for a one-dollar addition to bank reserves to work its way through the banking sys

The time it takes for a one-dollar addition to bank reserves to work its way through the banking sys

The time it takes for a one-dollar addition to bank reserves to work its way through the banking system and the financial portfolios of the public and have its full impact on the stock of money
A) is about one quarter of a year.
B) is betwe

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The time it takes for an additional dollar of net government expenditures to work its way through th

The time it takes for an additional dollar of net government expenditures to work its way through th

The time it takes for an additional dollar of net government expenditures to work its way through the economy and have its full effect
A) is about one quarter of a year.
B) is between one and two years.
C) is not yet known precisely be

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Effectively managing aggregate demand in order to stabilize nominal GDP requires

Effectively managing aggregate demand in order to stabilize nominal GDP requires

Effectively managing aggregate demand in order to stabilize nominal GDP requires
A) policy makers to know the size of the gap between current demand and demand at equilibrium.
B) only that policy makers know what level of aggregate demand i

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The time lags, which must be either reduced or known with some precision if fiscal policy is to be a

The time lags, which must be either reduced or known with some precision if fiscal policy is to be a

The time lags, which must be either reduced or known with some precision if fiscal policy is to be an effective stabilizing technique, are the lags between
A) the beginning of a cyclical movement and its recognition.
B) the decision that co

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Time lags occur when which of the following questions is asked?

Time lags occur when which of the following questions is asked?

Time lags occur when which of the following questions is asked?
A) Where is the economy now?
B) Where is the economy going?
C) How long will it take for a correct policy to be implemented?
D) All of the above.
E) None of the

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Which of the following policies face difficult problems of timing?

Which of the following policies face difficult problems of timing?

Which of the following policies face difficult problems of timing?
A) Fiscal policy
B) Monetary policy
C) Both of the above.
D) None of the above.

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Which combination of monetary and fiscal policies might policymakers elect to ward off a potential r

Which combination of monetary and fiscal policies might policymakers elect to ward off a potential r

Which combination of monetary and fiscal policies might policymakers elect to ward off a potential recession?
A) Fed sale of bonds combined with increased government spending
B) Fed sale of bonds combined with decreased government spending

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