Prices, including wages, adjust quickly to bring about full employment.

Monetary policy is used to moderate short-run fluctuations in the economy.

All of the above

Which policy tends to reduce both the rate of inflation and a balance of payments deficit?

(A) An increase in import tariffs

(B) An increase in taxes

(C) A reduction in the level of interest rates

(D) A rise in the country’s currency exchange rate

(E) All of the above

Which of the following best explains the difference between a country’s gross national product (GNP) and its gross domestic product (GDP)?

GNP measures all final goods and services produced in the public sector, whereas GDP measures only those produced in the private sector.

GNP measures all final goods and services produced in a nation during a year, whereas GDP measures only the value of output produced by domestic factors of production.

GNP measures all final goods and services produced by the productive factors located within a country, whereas GDP measures only the value of output produced by foreign-owned factors of production.

GNP measures the value of all the final goods and services produced by all of a country’s factors whether located within the country or abroad, whereas GDP measures the value of all the final goods and services produced within a country’s borders.

GNP measures trade with foreign countries, whereas GDP measures only domestic trade

Which of the following would tend to make expansionary fiscal policy most effective in changing gross domestic product?

A very low marginal propensity to consume

A very low rate of investment

A simultaneous decision by the Federal Reserve to increase the money supply

A vertical aggregate supply curve

A horizontal aggregate supply curve

Assume that the federal government is instituting a new health insurance program that results in equal increases in taxation. Output, the price level, and unemployment will most likely change in which of the following ways in the short run?

OutputPrice LevelUnemployment

Increase Increase Increase

Increase Increase Decrease

Decrease Increase Decrease

Decrease Decrease Decrease

No change No change No change

The Federal Reserve can decrease the lending ability of the banking system by which of the following actions?

Buying government securities

Increasing the discount rate

Raising taxes

Printing less paper money

All of the above

Deficit spending by the government may result in crowding out because the spending

Reduces the funds available for private investment

is usually financed by selling bonds to foreign banks

lowers the interest rate and thus discourages saving

leads to higher employment

all of the above

Which of the following are assets of a bank and at the same time the liabilities of the central bank?

Savings accounts and checking accounts

Coins and currency in its vault and its deposits in the Federal Reserve Bank

Securities issued by the United States Treasury and by state and local governments

Federal Reserve notes and coins and traveler’s checks

Loans and other interest-earning assets

When the Federal Reserve buys government bonds, which of the following can be expected to occur in the short run?

Дата добавления: 2015-10-30