Eco 2 final page 5

The government debt is reduced when it.....

Runs a surplus

True or false. This is a property of a bond, "all bonds are issued for time periods of no less than one year and no more than ten years".

False

True or false. When interest rates rise, security values rise.

False

Assume that in the US the actual deficit is 300 billion. if the US were at full employment, the deficit would be 100 billion. The structural deficit in the US is.....

100 billion

In 2016, the isle of Lucy's planned investment was 130 billion and its actual investment was 145 billion. In 2016, the isle of Lucy's unplanned inventory investment change was....

15 billion

If unplanned business investment is 20 million and planned investment is 20 million, then actual investment is.....

40 million

Assume that in Atlantis the actual deficit is 200 billion. If Atlantis were at full employment, the deficit would be 50 billion, The structural deficit in Atlantis is.....

50 billion

A recent study by economists at Yale university and the university of Chicago suggests that changing retirement plan enrolment options from 'opt-in' systems to 'opt-out' systems increased pension plan enroll meant after three months of work from __________ percent of workers to ________ percent of workers.

65;98

C=1000+.5Yd T=200 G=400 I=500 Refer to the equations, if government spending in kiwiland increases by 400, equilibrium output increases by .....

800

Assume an economy is in equilibrium at an output level of 2000 billion. If government spending decreases by 500 billion, then at the output level of 2000 billion, there is.....

An unplanned rise in inventories

Short term securities are usually called_________ and long term securities are usually called_________.

Bills, bonds

The fed used open market operations to....

Buy or sell government securities

If the economy's full employment output is 6 trillion, actual output is 3.5 trillion, and the budget deficit is 20 billion, the deficit in this case is known as a......

Cyclical deficit

If government purchases are decreased by $800 and taxes are decreased by $800, the equilibrium level of income will.....

Decrease by 800

True or false. As a percentage or government receipts, corporate income taxes are larger than personal income taxes and social security taxes combined

False

True or false. During recessions, automatic stabilisers work to reduce government expenditures and increase government revenues

False

True or false. If actual investment is greater than planned investment, unplanned inventories decline.

Flase

What determines tax revenues?

Income tax rate

Disposable income....

Increases when income increases

If planned investment is perfectly responsive to changes in the interest rate, the planned investment schedule.....

Is horizantel

The price of bonds and the interet rate are....

Negatively related

When aggregate price level (P) is multiplied by real aggregate income (Y), the result is.....

Nominal income

From time to time, the federal reserve buys back government bonds from the private sector through a process called....

Open market purchases

If planned investment is _________ to changes in the interest rate, the planned investment schedule is horizontal.

Perfectly responsive

If planned investment is __________ to changed in the interest rate, the planned investment schedule is vertical.

Perfectly unresponsive

An open market _________ of securities by the fed results in an increase in reserves and an increase in the _________ money.

Purchase, supply of

The federal debt is the....

Total amount owed to the public by the federal government

True or false. Automatic stabilisers include those elements of government spending the automatically grow during a recession

True

True or false. Firms and governments pay interest to the lenders that purchase their bonds

True

True or false. Firms react to negative inventory investment by increasing output

True

True or false. If the government runs a deficit, then the government debt increases

True

True or false. The average tax rate increased during the 1993-2000 Clinton administrations

True

In April 2015, the assets with the largest value on the Feds balance sheet was....

US treasury securities

An increase in the required reserve ratio.....

Will decrease the money supply