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.
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.
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1
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.
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.
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1
