Inflation was a major problem in the United States during the early years of the Great Depression.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2How does total taxes as a percentage of GDP in the United States compare to those of Western European countries, such as the United Kingdom, Germany, and Sweden?
a. U.S. taxation is smaller.
b. U.S. taxation is about the same.
c. U.S. taxation is slightly larger.
d. U.S. taxation is substantially larger.
QUESTION 3A preannounced contractionary money policy is more likely to create unemployment when people have rational, rather than adaptive, expectations.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4During periods of inflation, all prices of all products are rising.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5The income security program category for federal government outlays includes spending for:
a. Social Security.
b. Medicare.
c. Welfare.
d. Unemployment compensation.
e. All of these.
QUESTION 6Rational expectations theory rejects the concept that only unanticipated or surprise policies can influence inflation.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Inflation occurs when there is an increase in the purchasing power of money.
a. True
b. False
Indicate whether the statement is true or false
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