test 3
decreases; labor supply; leftward
an income tax __________ potential GDP by shifting the ___________ curve _____________
lower; decreasing
at the end of 2012 the fed was buying about $100 billion of securities per month, a much higher amount than normal. these purchases would ____________ the value of the dollar on foreign exchange markets thereby ____________ the US exports.
the bubble that was forcing asset prices higher
during the financial crisis of 08-09 the fed was concerned about ____________
cut; increased
during the reagan administration in the 1980s tax rates were _________ and the budget deficit _________
decisions related to government expenditure on goods and services, the value of transfer payments, and tax revenue
fiscal policy includes ___________
1000
if $1000 is invested at 3% per year for 10 years the investment grows to $1343.92. this means the present value $1343.92 at an interest rate of 3% 10 years from now is __________
sell US government securities
if the Fed wants to decrease the quantity of money it can _____________
low; aggregate demand
in 2012 ben bernanke said that fed policy had raised real GDP by almost 3%. He believes that the feds policy of keeping the federal funds rate _____ had resulted in an increase in ____________
the inflation rate will rise
in march 2013 the fed announced that it might decrease its open market purchases of securities by the end of the year. this announcement suggested that the fed is concerned that __________
inflation rate
monetary policy produces ripple effects some of which happen quickly and some that can take years to produce change. which of the following takes the longest to change?
decreases
on January 1, 2013 the income tax rate for single taxpayers making more than $400,000 per year increased from 35% to 39.6%. this tax increase _____________ potential GDP
increases; increases
taking amount of the supply side effects, a tax cut on labor income ____________ employment and _____________ potential GDP
has mostly been in deficit during the past 30 years
the US governments budget ______________
decreases; decreases; falls
the central bank of cobra sells securities in an open market operation, in the short run, aggregate demand ________ real GDP ________, and the price level ___________.
helps the president and the public stay informed about the state of the economy
the council of economic advisors _______
LIBOR
the european equivalent to the fed funds rate is ___________
total taz revenue minus total government outlays
the governments budget deficit or surplus equals the _____________
increases; decreases; increases
the peoples bank of china announced that it was lowering by 1.08 percentage points the one year lending rate in response to the slowdown of the chinese economy. this rate is the chinese equivalent of the federal funds rate in the US. This policy __________ the supply of loanable funds. as a result the long term real interest rate ______________ and planned expenditures __________
fed should adjust the federal funds rate to take account of deviations of inflation from its target and real GDP from potential GDP
the taylor rule states that the ____________
buy government securities in an open market operation
to increase the quantity of money in the economy, the federal reserve is likely to ________
can keep investment low
uncertainty about monetary policy ________________
buy; falls
when the fed raises the federal funds rate, in the foreign exchange market people __________ dollars and the price of the dollar ______ on the foreign exchange market
