ECO 336 CHAPTER 11 EXAM 2025
QUESTIONS AND ANSWERS
A common response to stop a depreciation of a currency is to use contractionary
monetary policy, which could lead to a recession. - ....ANSWER ...-True
Contractionary fiscal policy attempts to shift aggregate demand to the right. -
....ANSWER ...-False
Expansionary monetary policy is likely to lead to a depreciation of the nation's
currency. - ....ANSWER ...-True
Government spending and taxes - ....ANSWER ...-are a major determinant
of aggregate demand.
Fiscal policy is - ....ANSWER ...-the deliberate manipulation of taxation and
spending designed to affect the economy.
Changes in aggregate demand - ....ANSWER ...-could be caused by changes
in the spending decisions of the households, businesses, the government, and
foreigners.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, Which of the following is NOT a reason why the effects of tax cuts on
government spending dissipate and each additional change in consumption and
income becomes smaller and smaller? - ....ANSWER ...-Some of the increase
is used for business investment.
Intermediate inputs are - ....ANSWER ...-goods purchased by one business
from another to use in production.
Expansionary monetary policy involves an increase in the money supply and a fall
in interest rates, leading to a positive expansion in income. - ....ANSWER ...-
True
Along the aggregate supply curve - ....ANSWER ...-the middle,
upwardminus−sloping part of the aggregate supply curve would be associated with
a growing economy that experienced increased prices from resources that are
becoming relatively scarce.
It is more certain how expansionary monetary policy will affect the current account
than how expansionary fiscal policy will affect it. - ....ANSWER ...-False
An example of expansionary fiscal policy would be - ....ANSWER ...-an
increase in government spending on infrastructure to create jobs and improve the
economy.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
QUESTIONS AND ANSWERS
A common response to stop a depreciation of a currency is to use contractionary
monetary policy, which could lead to a recession. - ....ANSWER ...-True
Contractionary fiscal policy attempts to shift aggregate demand to the right. -
....ANSWER ...-False
Expansionary monetary policy is likely to lead to a depreciation of the nation's
currency. - ....ANSWER ...-True
Government spending and taxes - ....ANSWER ...-are a major determinant
of aggregate demand.
Fiscal policy is - ....ANSWER ...-the deliberate manipulation of taxation and
spending designed to affect the economy.
Changes in aggregate demand - ....ANSWER ...-could be caused by changes
in the spending decisions of the households, businesses, the government, and
foreigners.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, Which of the following is NOT a reason why the effects of tax cuts on
government spending dissipate and each additional change in consumption and
income becomes smaller and smaller? - ....ANSWER ...-Some of the increase
is used for business investment.
Intermediate inputs are - ....ANSWER ...-goods purchased by one business
from another to use in production.
Expansionary monetary policy involves an increase in the money supply and a fall
in interest rates, leading to a positive expansion in income. - ....ANSWER ...-
True
Along the aggregate supply curve - ....ANSWER ...-the middle,
upwardminus−sloping part of the aggregate supply curve would be associated with
a growing economy that experienced increased prices from resources that are
becoming relatively scarce.
It is more certain how expansionary monetary policy will affect the current account
than how expansionary fiscal policy will affect it. - ....ANSWER ...-False
An example of expansionary fiscal policy would be - ....ANSWER ...-an
increase in government spending on infrastructure to create jobs and improve the
economy.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
