If the MPC = .75, the spending multiplier is:
a. 4.
b. 5.
c. 1.33.
d. 1.20.
e. .25.
QUESTION 2The Fed:
a. has little control over the money supply.
b. serves as the central bank for the United States.
c. often uses a mix of lower taxes in its fiscal policy.
d. ensures commercial bank profitability.
QUESTION 3Which of the following is a correct characterization of socialism?
a. Tradition answers the basic economic questions.
b. Markets are used exclusively to answer the basic economic questions.
c. Central planning is seldom used to answer the basic economic questions.
d. Government ownership of many resources and centralized decision-making answers the basic economic questions.
QUESTION 4When the MPC gets smaller, the spending multiplier:
a. gets larger.
b. gets smaller.
c. stays the same.
d. gets smaller at low real GDP, and larger at high real GDP.
e. gets larger at low real GDP, and smaller at high real GDP.
QUESTION 5Which of the following is not part of the Federal Reserve System?
a. Council of Economic Advisors.
b. Board of Governors.
c. Federal Open Market Committee.
d. 12 Federal Reserve District Banks.
e. Federal Advisory Council.
QUESTION 6The term socialism refers to which of the following?
a. A religion centered on community interaction.
b. An economic system characterized by private ownership of resources, and decentralized market allocation.
c. An economic system characterized by government ownership of resources and centralized allocation.
d. None of the above answers are correct.
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