econ 2301 Exam 2| Questions with 100%
Solutions/Verified Answers
In late 2008, the U.S. government extended unemployment insurance benefits for
seven additional weeks, in recognition of the growing unemployment problem. This
extension is an example of
1)
automatic fiscal policy.
2)
discretionary fiscal policy.
3)
expansionary monetary policy.
4)
supply-side fiscal policy. - ANSWER 2)
discretionary fiscal policy.
Expansionary fiscal policy leads to ____ exchange rates, _____ exports, and _____
imports.
1)
lower; increased; increased
2)
higher; decreased; decreased
3)
lower; decreased; increased
4)
higher; decreased; increased - ANSWER 4)
higher; decreased; increased
,An expansionary fiscal policyI. includes an increase in government spending.II.
includes tax cuts.III. increases a government budget deficit or reduces a government
budget surplus.
1)
I, II, and III
2)
I and II only
3)
I and III only
4)
II and III only - ANSWER 1)
I, II, and III
The impact of fiscal policy is
1)
magnified because of crowding out and weakened because of crowding in.
2)
magnified because of crowding in and weakened because of crowding out.
3)
magnified because of crowding out and crowding in.
4)
weakened because of crowding out and crowding in. - ANSWER 4)
weakened because of crowding out and crowding in.
A bank's reserves are
1)
, the minimum value of assets it must have.
2)
the amount of gold it is required to have as reserves against loans.
3)
the value of federal securities it is required to have as reserves against loans.
4)
deposits that banks have accepted from customers but have not loaned out. - ANSWER
4)
deposits that banks have accepted from customers but have not loaned out.
The multiplier is given by
1)
the ratio of the initial change in a component of aggregate demand to the change in
the quantity of real GDP demanded at each price level.
2)
the ratio of the change in the quantity of real GDP demanded at each price level to
the initial change in a component of aggregate demand that produced it.
3)
the amount by which the quantity of real GDP demanded at each price level changes in
response to an initial change in a component of aggregate demand.
4)
the percentage change between the initial change in a component of aggregate
demand and the final change in the quantity of real GDP demanded at each price level. -
ANSWER 2)
the ratio of the change in the quantity of real GDP demanded at each price level to
the initial change in a component of aggregate demand that produced it.
Contractionary fiscal policy includes
Solutions/Verified Answers
In late 2008, the U.S. government extended unemployment insurance benefits for
seven additional weeks, in recognition of the growing unemployment problem. This
extension is an example of
1)
automatic fiscal policy.
2)
discretionary fiscal policy.
3)
expansionary monetary policy.
4)
supply-side fiscal policy. - ANSWER 2)
discretionary fiscal policy.
Expansionary fiscal policy leads to ____ exchange rates, _____ exports, and _____
imports.
1)
lower; increased; increased
2)
higher; decreased; decreased
3)
lower; decreased; increased
4)
higher; decreased; increased - ANSWER 4)
higher; decreased; increased
,An expansionary fiscal policyI. includes an increase in government spending.II.
includes tax cuts.III. increases a government budget deficit or reduces a government
budget surplus.
1)
I, II, and III
2)
I and II only
3)
I and III only
4)
II and III only - ANSWER 1)
I, II, and III
The impact of fiscal policy is
1)
magnified because of crowding out and weakened because of crowding in.
2)
magnified because of crowding in and weakened because of crowding out.
3)
magnified because of crowding out and crowding in.
4)
weakened because of crowding out and crowding in. - ANSWER 4)
weakened because of crowding out and crowding in.
A bank's reserves are
1)
, the minimum value of assets it must have.
2)
the amount of gold it is required to have as reserves against loans.
3)
the value of federal securities it is required to have as reserves against loans.
4)
deposits that banks have accepted from customers but have not loaned out. - ANSWER
4)
deposits that banks have accepted from customers but have not loaned out.
The multiplier is given by
1)
the ratio of the initial change in a component of aggregate demand to the change in
the quantity of real GDP demanded at each price level.
2)
the ratio of the change in the quantity of real GDP demanded at each price level to
the initial change in a component of aggregate demand that produced it.
3)
the amount by which the quantity of real GDP demanded at each price level changes in
response to an initial change in a component of aggregate demand.
4)
the percentage change between the initial change in a component of aggregate
demand and the final change in the quantity of real GDP demanded at each price level. -
ANSWER 2)
the ratio of the change in the quantity of real GDP demanded at each price level to
the initial change in a component of aggregate demand that produced it.
Contractionary fiscal policy includes
