macro exam 3 adaptive learnings

Which of the following policies involves decreasing government purchases and/or increasing taxes? Multiple choice question. A contractionary fiscal policy An expansionary monetary policy A contractionary monetary policy An expansionary fiscal policy

A contractionary fiscal policy

Which of the following best describes fiscal policy? The short-term fluctuations experienced in the economy due to changes in levels of economic activity The actions taken by a country's central bank to expand the money supply and lower interest rates The concept that an additional dollar of expenditures will result in the creation of more than one dollar's worth of real GDP Changes in government purchases and/or taxes designed to achieve full employment and low inflation

Changes in government purchases and/or taxes designed to achieve full employment and low inflation

This policy involves increasing government purchases and/or decreasing taxes. Multiple choice question. Contractionary fiscal policy Expansionary monetary policy Expansionary fiscal policy Contractionary monetary policy

Expansionary monetary policy

Suppose the government of a country changes its level of purchases and/or taxes to achieve full employment and low inflation. What type of policy is this called? Multiple choice question. Fiscal policy Monetary policy Tax policy Financial policy

Fiscal policy

Which of the following are tools of fiscal policy? Multiple choice question. Taxation and government purchases Taxation and open market operations Open market operations and interest rate changes Interest rate changes and government purchases

Taxation and government purchases

The expenditures multiplier times the initial change in expenditures equals: Multiple choice question. a change in aggregate expenditures. a change in aggregate demand. 1/(1 - MPC). aggregate demand.

a change in aggregate demand.

The multiplier effect is/are the: short-term fluctuations experienced in the economy due to changes in levels of economic activity. actions taken by a country's central bank to expand the money supply and lower interest rates. concept that an additional dollar of expenditures will result in the creation of more than one dollar's worth of real GDP. changes in government purchases and/or taxes designed to achieve full employment and low inflation.

concept that an additional dollar of expenditures will result in the creation of more than one dollar's worth of real GDP

When government spending decreases, AD: Multiple choice question. does not change. is vertical. decreases. increases.

decreases

When taxes increase, AD: Multiple choice question. decreases. does not change. increases. is vertical.

decreases.

Changes in government purchases and/or taxes designed to achieve full employment and low inflation is called: Multiple choice question. inflation policy. financial policy. monetary policy. fiscal policy.

fiscal policy.

Changes in government purchases and/or taxes designed to achieve full employment and low inflation is called: Multiple choice question. inflation policy. monetary policy. fiscal policy. financial policy.

fiscal policy.

The level of real GDP produced in an economy when it is operating at the natural rate of unemployment is called: Multiple choice question. full output. expansionary GDP. the natural rate of GDP. full-employment GDP.

full-employment GDP.

One of the most frequently used tools of fiscal policy is changing: Multiple choice question. government purchases. the expected price level. interest rates. import duties

government purchases.

If the economy is experiencing a recession, the goal of fiscal policy will be to: Multiple choice question. increase aggregate demand. increase long-run aggregate supply. reduce short-run aggregate supply. reduce aggregate demand.

increase aggregate demand.

When taxes decrease, AD: Multiple choice question. decreases. does not change. curve becomes vertical. increases.

increases.

Consumption (C) + Gross Investment (I) + Government Purchases (G) + Net Exports (NX) characterizes: Multiple choice question. real GDP expenditures. the capital account. the business cycle. the current account.

real GDP expenditures

When an economy is producing above full employment, the goal of fiscal policy will be to: Multiple choice question. increase aggregate demand. reduce aggregate demand. increase long-run aggregate supply. reduce short-run aggregate supply.

reduce aggregate demand.

The multiplier effect is: Multiple choice question. the concept that an additional dollar of expenditures will result in the creation of more than one dollar's worth of real GDP. the short-term fluctuations experienced in the economy due to changes in levels of economic activity. the changes in government purchases and/or taxes designed to achieve full employment and low inflation. the actions taken by a country's central bank to expand the money supply and lower interest rates.

the concept that an additional dollar of expenditures will result in the creation of more than one dollar's worth of real GDP.

The business cycle is: Multiple choice question. the changes in government purchases and/or taxes designed to achieve full employment and low inflation. the actions taken by a country's central bank to expand the money supply and lower interest rates. the short-term fluctuations experienced in the economy due to changes in levels of economic activity. the concept that an additional dollar of expenditures will result in the creation of more than one dollar's worth of real GDP.

the short-term fluctuations experienced in the economy due to changes in levels of economic activity.