Econ Final Chap 13-16 18-20

which of the following best describes the built-in stabilizers as they function in the united states?

Personal and corporate income tax collections automatically rise and transfers and subsidies automatically decline as GDP rises.

an appropriate fiscal policy for a severe recession is

a decrease in tax rates

when economist say that money serves as a medium of exchange, they mean that it is

a means of payment

demand-pull inflation in the short run is best shown as

a rightward shift in the aggregate demand curve

the federal reserve regulates the money supply primarily by

altering the reserves of commercial banks, largely through sales and purchases of government bonds

assume that aggregate demand in the economy is excessive causing demand-pull inflation. which of the following would be the most in accord with appropriate government fiscal policy

an increase in federal income tax rates

which of the following statements is correct

built-in stability only partially offsets fluctuations in economic activity

the actual budget deficit of the federal government in 1991 was about $269 billion. on the basis of this information it:

cannot be determined whether fiscal policy had an expansionary or contractionary impact in 1991

If the MPC in an economy is .8, government could shift the aggregate demand curve rightward by $100 billion by:

decreasing taxes by $25 billion

discretionary fiscal policy will stabilize the economy most when

deficits are incurred during recessions and surpluses during inflations

fiscal policy refers to the

deliberate changes in government spending and taxes to stabilize domestic output, employment, and the price level

contractionary fiscal policy is so named because it

is aimed at reducing aggregate demand and thus achieving price stability

expansionary fiscal policy is so named because it

is designed to expand real GDP

united states currency has value primarily because it

is relatively scarce, is legal tender, and is generally acceptable in exchange for goods and services

a fractional reserve banking system

is susceptible to bank "panics" or "runs"

a tax reduction of a specific amount will be more expansionary, the

larger the economy's MPC

cost-push inflation in the short run is best represented as a

leftward shift of the aggregate supply curve

which of the following is a tool of monetary policy

open-market operations

a rightward shift of short run aggregate supply might be caused by an increase in

productivity (ASLR would increase)

a major advantage of the built-in or automatic stabilizers is that they

require no legislative action by Congress to be made effective

fiscal policy is carried out primarily by

the federal government

the purchase of government securities from the public by the fed will cause

the money supply to increase

the federal open market committee (FOMC) is made up of

the seven members of the board of governors of the federal reserve system along with the president of the new york federal reserve bank and four other federal reserve bank presidents on a rotating basis