Econ

Which of the following policies might create demand-pull inflation?

A cut in taxes

An increase in input prices will cause

AD to decrease (move to the left).

An increase in government spending will cause

AD to increase (move to the right)

A decrease in interest rates will cause

AD to increase (move to the right).

Other things equal, a strong dollar will shift

AD to the left (cause it to decrease).

Other things equal, an Increase in Confident will shift

AD to the right (cause it to increase).

Other things equal, an improvement in productivity will shift

AS to the right (cause it to increase).

If the Federal Reserve wished to engage in contractionary monetary policy, it could

All of these.

Which of the following policies might create demand-pull inflation?

An increase government spending

Cost-push inflation is caused by which of the following, other things equal?

An increase in input costs.

.​Which of the following would qualify as an aggregate supply shock?

An unexpected increase in oil prices

the critical elements of nondiscretionary fiscal policy are

a progressive income tax and a welfare state.

The interest rate effect, the real balance effect, and the foreign purchases effect suggest that the

aggregate demand curve is

Contractionary monetary policy would shift the

aggregate demand curve to the left.

Expansionary monetary policy would shift the

aggregate demand curve to the right.

Short-run expansionary Fiscal Policy would result in

aggregate demand moving to the right.

Using the aggregate supply-aggregate demand model, the tax cuts of 2001 and 2003 that came in the form of tax rebate checks would cause

aggregate demand to shift to the right

The mistiming problem with discretionary fiscal policy results from

all of the options are correct.

The purpose of fiscal policy is to

alter the direction of the economy.

. All of the following will result in a leftward shift of the aggregate supply curve, except

an improvement in technology.

Other things equal, a tax will shift

b. AD to the left (cause it to decrease).

. The Federal Funds Rate is the rate at which*

banks lend to one another to meet reserve requirements.

Other things equal, an improvement in productivity will shift

c. AS to the right (cause it to increase).

An increase in the target for the federal funds rate would be an example of

contractionary monetary policy.

Between 2004 and 2005 the Federal Reserve raised interest rates 11 times. This is an example of

contractionary monetary policy.

sale of government debt as part of open market operations would be an example of

contractionary monetary policy.

From the early 1980's through 2000 the Federal Reserve's primary focus was on

controlled inflation and stable growth.

Banks

create money because they take deposits and make loans.

Policies focused on lowering interest rates to allow people to buy homes would be considered

demand-side policies.

The portion of the Obama stimulus package that increased spending is best thought of as

discretionary (and expansionary) fiscal policy

The 2003 tax rebate is an example of

discretionary fiscal policy.

A purchase of government debt/Bonds as part of open market operations would be an example of

expansionary monetary policy.

The Federal Reserve has

indirect influence over macroeconomic variables such as unemployment and inflation through the use of intermediate targets.

If interest rates near zero fail to stimulate borrowing, the economy is in a

liquidity trap.

When the transmission mechanism breaks down macroeconomists call this the

liquidity trap.

One typical response to a recession for those engaged in discretionary fiscal policy is to

lower taxes and increase spending.

If the Federal Reserve wished to engage in expansionary monetary policy it could

lower the primary credit rate.

If the Fed wants banks to have more money to lend, it can

lower the reserve ratio.

If the Federal Reserve wished to engage in expansionary monetary policy it could

lower the reserve ratio.

A monetary aggregate is

measure of the quantity of money in the economy

. All of the following will result in a leftward shift of the aggregate demand curve, except

monetary policy that purposefully decreases interest rates.

The Federal Reserve governs U.S.

monetary policy.

The portion of the Obama stimulus package that bolstered state Medicaid plans is best thought of as

nondiscretionary fiscal policy

When domestic prices rise,

people buy more imported goods

When the Federal Reserve loans money to banks, the rate it charges banks with excellent credit

primary credit rate.

In terms of timing, the 2003 tax rebate was

proposed at a time the economy needed a boost.

The amount of money that a bank must keep on reserve at the Federal Reserve the

reserve ratio.

If the Federal Reserve wished to increase interest rates using open market operations it would

sell U.S. government securities.

The "monetary policy transmission mechanism" connects

short-term interest rates to aggregate demand.

Policies focused on putting people to work by reducing the regulatory requirements associated

supply-side policies.

The primary credit rate refers to the rate at which

the Federal Reserve charges banks (with excellent credit) for loans.

An example of nondiscretionary fiscal policy would be

the existence of the progressive federal income tax.

Discretionary Fiscal Policy differs from Nondiscretionary Fiscal Policy in that

the former requires timely decisions, whereas the latter is built into the system.

The reserve ratio is*

the percentage of every dollar deposited in a checking account that a bank must maintain in reserves.

When aggregate demand increases in the Intermediate range of the aggregate supply curve,

the price level increases and the output stays the same.

When aggregate demand increases in the Keynesian range of the aggregate supply curve,

the price level stays the same and the output increases.

When economists say that the economy is at full-employment, they mean that

there is no cyclical unemployment.

If you were to use an aggregate supply and aggregate demand diagram to model nondiscretionary and discretionary fiscal policy in reaction to a positive aggregate demand shock, you would see the aggregate demand curve move

to the left, back toward its pre-shock position as a result of these policies.

If you were to use an aggregate supply and aggregate demand diagram to model nondiscretionary and discretionary fiscal policy in reaction to a negative aggregate demand shock, you would see the aggregate demand curve move

to the right, back toward its pre-shock position as a result of these policies.

disagreements about the shape of the aggregate supply curve focus on the degree of blank in the economy

unemployment

The Classical portion of the aggregate supply curve is

vertical.

When the Federal Reserve wishes to, in the long run, decrease inflation it

will decrease the money supply by selling bonds.

Which of the following would qualify as an aggregate demand shock?

​An unexpected reduction in consumer confidence

Fiscal Policy is controlled by

​Congress and the President.

​Which of the following would be described as the operational lag?

​The time required to get a particular plan implemented with the money getting into peoples' hands.

Which of the following would be described as the recognition lag?

​The time required to know that there is a recession.

An example of discretionary fiscal policy would be

​a tax increase adopted to control inflationary pressures.

A political problem with discretionary fiscal policy is the

​expansionary bias.

Fiscal policy is purposeful movements in ____________ designed to direct an economy.

​government spending and taxes

Other things equal, a increase in regulation will shift

. AS to the left (cause it to decrease).

The Keynesian portion of the aggregate supply curve is

. horizontal.

.​Which of the following would be described as the administrative lag?

. ​The time required to agree upon a policy remedy for a recession.

Which monetary aggregate is the broadest?

M2.

Demand-pull inflation is caused by which of the following, other things equal?

Monetary policy that purposefully decreases interest rates.

A political leader suggesting that an economic downturn will be cushioned automatically is referring to

Nondiscretionary Fiscal Policy.