Economics

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 tax rate increases
B) Fed sale of bonds combined with tax rate decreases
C) Fed purchase o

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

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

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

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Which is an example of restrictive fiscal policy?

Which is an example of restrictive fiscal policy?

Which is an example of restrictive fiscal policy?
A) An increase in the discount rate
B) An increase in the federal funds rate
C) An increase in reserve requirements
D) A lowering of tax rates
E) A lowering of government spen

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Which is an example of expansionary fiscal policy?

Which is an example of expansionary fiscal policy?

Which is an example of expansionary fiscal policy?
A) A lowering of tax rates
B) A lowering of government spending
C) An increase in the discount rate
D) An increase in the federal funds rate
E) An increase in reserve require

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Fiscal policy is (Multiple Choice Question)

Fiscal policy is (Multiple Choice Question)

Fiscal policy is
A) another term for monetary policy.
B) the implementation of import fees and restrictions to promote the domestic economy.
C) the use of the government budget to bring about desired levels of total spending.
D) t

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Keynes rhymes with (Multiple Choice Question)

Keynes rhymes with (Multiple Choice Question)

Keynes rhymes with
A) beans.
B) gains.
C) genies.
D) none of the above.

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Discretionary monetary policy was more frequently employed than discretionary fiscal policy in the t

Discretionary monetary policy was more frequently employed than discretionary fiscal policy in the t

Discretionary monetary policy was more frequently employed than discretionary fiscal policy in the two decades following World War II because
A) economic conditions did not seem to require any use of fiscal policy tools during this period.

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For many years after the Great Depression, economists believed a central bank policy of increasing b

For many years after the Great Depression, economists believed a central bank policy of increasing b

For many years after the Great Depression, economists believed a central bank policy of increasing bank reserves in response to a recession would be
A) largely ineffective.
B) the opposite of what the circumstances required.
C) useless

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The analysis in Chapter 15 implies that the housing bubble of the last decade would likely have been

The analysis in Chapter 15 implies that the housing bubble of the last decade would likely have been

The analysis in Chapter 15 implies that the housing bubble of the last decade would likely have been avoided if
A) the Fed had pursued a monetary equilibrium policy as opposed to cheap interest rate policies.
B) people weren't as greed

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Your authors argue that unsustainable booms, followed by recessionary busts, are primarily caused by

Your authors argue that unsustainable booms, followed by recessionary busts, are primarily caused by

Your authors argue that unsustainable booms, followed by recessionary busts, are primarily caused by the Fed's expansionary monetary policies. Which of the following serves as an exception to their claim?
A) The Great Depression of the 1930

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According to your authors, the "Great Recession" that began in 2008 is evidence of

According to your authors, the "Great Recession" that began in 2008 is evidence of

According to your authors, the "Great Recession" that began in 2008 is evidence of
A) an unstable free market system.
B) rampant greed among entrepreneurs.
C) a cluster or accumulation of errors.
D) antagonistic interest

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According to your authors, America's Great Depression of the 1930s was evidence of

According to your authors, America's Great Depression of the 1930s was evidence of

According to your authors, America's Great Depression of the 1930s was evidence of
A) an unstable free market system
B) rampant greed among entrepreneurs.
C) a cluster or accumulation of errors.
D) antagonistic interests amon

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According to your authors, the "boom" phase of the so-called "business cycle" is

According to your authors, the "boom" phase of the so-called "business cycle" is

According to your authors, the "boom" phase of the so-called "business cycle" is
A) caused by an expansionary increase of the money supply.
B) a systematic accumulation of mistakes among businesses and households across

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What leads thousands of profit seeking entrepreneurs to misread the signals of the market-price syst

What leads thousands of profit seeking entrepreneurs to misread the signals of the market-price syst

What leads thousands of profit seeking entrepreneurs to misread the signals of the market-price system?
A) Poor budget policy on behalf of government officials
B) The globalization of the world economy
C) An artificial lowering of inte

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According to your authors, the "boom-bust" cycle is primarily caused by

According to your authors, the "boom-bust" cycle is primarily caused by

According to your authors, the "boom-bust" cycle is primarily caused by
A) government tax and spend policies.
B) an artificial lowering of interest rates through expansionary monetary policy.
C) waves of irrational optimism a

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According to your textbook, expansionary monetary policy

According to your textbook, expansionary monetary policy

According to your textbook, expansionary monetary policy
A) encourages entrepreneurs to invest in projects that only appear profitable.
B) creates a temporary "boom," or economic expansion.
C) will ultimately be followed by a

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Your textbook uses the "bite, chew, choke" story to explain

Your textbook uses the "bite, chew, choke" story to explain

Your textbook uses the "bite, chew, choke" story to explain
A) how restrictive monetary policy leads to a recession.
B) how expansionary monetary policy ultimately leads to a recession.
C) how restrictive fiscal policy leads

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When interest rates are artificially lowered through expansionary monetary policy,

When interest rates are artificially lowered through expansionary monetary policy,

When interest rates are artificially lowered through expansionary monetary policy,
A) longer-term investment projects appear to be more profitable.
B) production of capital goods increases.
C) the economy experiences an unsustainable b

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A recession shows (Multiple Choice Question)

A recession shows (Multiple Choice Question)

A recession shows
A) supply always equals demand.
B) supply never equals demand
C) real GDP must be lower than nominal GDP.
D) a "cluster of errors" has occurred throughout the economy.
E) not enough households are

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To describe recessions as a "cluster of errors" in the economy means

To describe recessions as a "cluster of errors" in the economy means

To describe recessions as a "cluster of errors" in the economy means
A) markets never clear, even in the best of times.
B) something has caused people to systematically misread the signals provided by the market process.
C) t

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A recession shows (Multiple Choice Question)

A recession shows (Multiple Choice Question)

A recession shows
A) supply always equals demand.
B) supply never equals demand.
C) thousands of businesspeople have misread market signals.
D) real GDP must be lower than nominal GDP.
E) not enough households are using their

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To ask "what causes a recession" is the same as asking

To ask "what causes a recession" is the same as asking

To ask "what causes a recession" is the same as asking
A) "why does supply meet demand?"
B) "what is the link between price elasticity of demand and price elasticity of supply?"
C) "why have so many i

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Recessions are typically (Multiple Choice Question)

Recessions are typically (Multiple Choice Question)

Recessions are typically
A) unintended and disruptive.
B) easy to predict in advance.
C) the result of non-monetary disturbances.
D) events economists have a hard time explaining.

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Recessions are largely the result of

Recessions are largely the result of

Recessions are largely the result of
A) high wages.
B) the wishful thinking of zero economic growth advocates.
C) widespread and systemic errors from manipulated market signals.
D) none of the above.

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When interest rates are free from central bank manipulation, and fall due to an increase in househol

When interest rates are free from central bank manipulation, and fall due to an increase in househol

When interest rates are free from central bank manipulation, and fall due to an increase in household savings, this
A) provides an incentive for government to create a budget surplus.
B) sends a "green light" signal for businesses

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Recalling from Chapter 5, fill in the blanks: Other things constant, when household "time preference

Recalling from Chapter 5, fill in the blanks: Other things constant, when household "time preference

Recalling from Chapter 5, fill in the blanks: Other things constant, when household "time preferences" ________, business investment tends to ________.
A) fall; fall
B) fall; rise
C) rise; fall
D) rise; rise

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Recalling from Chapter 5, fill in the blanks: Other things constant, when households decide to save

Recalling from Chapter 5, fill in the blanks: Other things constant, when households decide to save

Recalling from Chapter 5, fill in the blanks: Other things constant, when households decide to save more, the supply of credit rises, interest rates ________ and business investment ________.
A) rise; rises
B) rise; falls
C) fall; rise

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Recalling from Chapter 5, fill in the blanks: Other things constant, when households decide to save

Recalling from Chapter 5, fill in the blanks: Other things constant, when households decide to save

Recalling from Chapter 5, fill in the blanks: Other things constant, when households decide to save more, the supply of credit ________ and interest rates ________.
A) falls; rise
B) falls; fall
C) rises; rise
D) rises; fall

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Recall from Chapter 5: Other things constant, when households lower their time preferences, and demo

Recall from Chapter 5: Other things constant, when households lower their time preferences, and demo

Recall from Chapter 5: Other things constant, when households lower their time preferences, and demonstrate a willingness to postpone some present consumption for future consumption,
A) their savings increase and interest rates rise.
B) the

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Recall from Chapter 5: Other things constant, when households lower their time preferences, and demo

Recall from Chapter 5: Other things constant, when households lower their time preferences, and demo

Recall from Chapter 5: Other things constant, when households lower their time preferences, and demonstrate a willingness to postpone some present consumption for future consumption,
A) their savings increase.
B) their savings decrease.

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The goal of a gold standard is to

The goal of a gold standard is to

The goal of a gold standard is to
A) return money back to its natural state.
B) shift wealth from the middle class to the rich.
C) reduce uncertainty by limiting the power of the Federal Reserve to increase the amount of money in circu

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According to your textbook authors, monetary calculation would improve if

According to your textbook authors, monetary calculation would improve if

According to your textbook authors, monetary calculation would improve if
A) the government subsidizes business production.
B) the Fed sought to establish monetary equilibrium.
C) Congress seeks to establish a budget surplus.
D) d

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If monetary equilibrium were to occur

If monetary equilibrium were to occur

If monetary equilibrium were to occur
A) inflation would not occur.
B) deflation would not occur.
C) the price level would be stable.
D) all of the above would be true.
E) none of the above would be true.

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When monetary equilibrium occurs, (Multiple Choice Question)

When monetary equilibrium occurs, (Multiple Choice Question)

When monetary equilibrium occurs,
A) the demand for final goods and services equals the supply of final goods and services.
B) gross business investment falls to zero.
C) relative prices remain constant.
D) the quantity supplied o

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A primary goal of the Fed, if it sought after monetary equilibrium, is to

A primary goal of the Fed, if it sought after monetary equilibrium, is to

A primary goal of the Fed, if it sought after monetary equilibrium, is to
A) keep interest rates stable.
B) keep jobs plentiful.
C) keep the quantity supplied of money equal to the quantity demanded.
D) get the national debt paid

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According to your text, open market operations

According to your text, open market operations

According to your text, open market operations
A) can be a difficult and delicate task.
B) are free from political pressures.
C) are designed solely in the national interest.
D) have failed to be effective ever since the U.S. has

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Which organization is responsible for managing the nation's money supply?

Which organization is responsible for managing the nation's money supply?

Which organization is responsible for managing the nation's money supply?
A) Fort Knox
B) The United States Congress
C) The United States Treasury
D) The Federal Open Market Committee
E) The American Economic Association

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The Federal Open Market Committee (FOMC) is responsible for managing the nation'sA) domestic economi

The Federal Open Market Committee (FOMC) is responsible for managing the nation'sA) domestic economi

The Federal Open Market Committee (FOMC) is responsible for managing the nation's
A) domestic economic policy.
B) international trade policy.
C) money supply.
D) gold and silver reserves.
E) wage and retirement policies.

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What happens when the Federal Reserve purchases U.S. government bonds?

What happens when the Federal Reserve purchases U.S. government bonds?

What happens when the Federal Reserve purchases U.S. government bonds?
A) Interest rates rise because bonds become scarcer.
B) Commercial bank reserves increase.
C) The national debt declines in size.
D) The growth rate of the mon

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If the Fed purchases government bonds, it

If the Fed purchases government bonds, it

If the Fed purchases government bonds, it
A) decreases bank reserves and the supply of money.
B) decreases bank reserves but increases the supply of money.
C) increases bank reserves and the supply of money.
D) increases bank rese

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