Assignment 11 Macro

1.

1 point

The group of three economists appointed by the president to provide fiscal policy recommendations is the:

Council of Economic Advisers.

Joint Economic Committee.

Bureau of Economic Analysis.

Federal Reserve Board of Governors.

2.

1 point

Fiscal policy refers to the:

fact that equal increases in government spending and taxation will be contractionary.

deliberate changes in government spending and taxes to achieve greater equality in the distribution of income.

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

altering of the interest rate to change aggregate demand.

3.

1 point

Discretionary fiscal policy is so named because it:

involves specific changes in T and G undertaken expressly for stabilization at the option of Congress.

is invoked secretly by the Council of Economic Advisers.

occurs automatically as the nation's level of GDP changes.

is undertaken at the option of the nation's central bank.

4.

1 point

Expansionary fiscal policy is so named because it:

is designed to expand real GDP.

necessarily expands the size of government.

is aimed at achieving greater price stability.

involves an expansion of the nation's money supply.

5.

1 point

An economist who favors smaller government would recommend:

tax cuts during recession and tax increases during inflation.

increases in government spending during recession and tax increases during inflation.

tax cuts during recession and reductions in government spending during inflation.

tax increases during recession and tax cuts during inflation.

6.

1 point

If the MPS in an economy is .1, government could shift the aggregate demand curve rightward by $40 billion by:

increasing government spending by $40 billion.

increasing taxes by $4 billion.

increasing government spending by $4 billion.

decreasing taxes by $4 billion

7.

1 point

An economist who favored expanded government would recommend:

tax cuts during recession and reductions in government spending during inflation.

tax cuts during recession and tax increases during inflation.

tax increases during recession and tax cuts during inflation.

increases in government spending during recession and tax increases during inflation.

8.

1 point

Which of the following represents the most expansionary fiscal policy?

A $10 billion increase in government spending.

A $10 billion decrease in government spending.

A $10 billion tax cut.

A $10 billion tax increase.

9.

1 point

Which of the following represents the most contractionary fiscal policy?

A $30 billion tax cut.

A $30 billion tax increase.

A $30 billion increase in government spending.

A $30 billion decrease in government spending.

10.

1 point

A tax reduction of a specific amount will be more expansionary the:

less is the economy's built-in stability.

smaller is the economy's multiplier.

smaller is the economy's MPC.

larger is the economy's MPC.