Increasing government spending will likely lead to all of the following, EXCEPT: How would a government most likely change its tax rates during a recession? Suppose that the Fed engages in an expansionary monetary policy, which reduces interest rates. Decide whether the following statement is true or false makes sense. Rural development is the specialty of which cabinet-level agency? securities, which results in a $2000 billion decrease in the money supply. True or False: the right. What are What is the difference between reserves and excess reserves in terms of banking? the decision to increase the budget will depend on whether members are using the indoor facility at least two times a week. What does a contractionary gap indicate about output in the short-run? Which organization is the newest cabinet-level department in the United States Government? Which of the following reduces the effects of expansionary fiscal policy? When the nominal interest rate is rising the real interest rate is necessarily rising: when the nominal interest rate is falling, the real interest rate is necessarily falling. If the value of the good or service is not included, explain why not. There is an accompanying Practice Book and Teacher's Resource CD-ROM available separately. The Treasury Department oversees the IRS, one of the most controversial of all government agencies. 2. 1. Samples of 500 pieces were selected at random, and the defective rate was found to be 0.025%0.025 \%0.025%. It helps us predict future changes in the atmosphere or climate. risk? - Minting coin currency It creates inflation. When the Federal Reserve lowers the discount rate, what will happen? This lowers the interest rate, which Which of the following is true regarding capitalism and communism? Higher disposable income, higher consumption, higher real GDP, lower unemployment. component of. Who does the U.S. Constitution assign sole responsibility for the budget and federal taxation? The demand for physiotherapists, at physiotherapy clinics. A decrease in the money supply will raise the interest rate, decrease investment spending and . During deflationary periods, central banks reduce their policy rates to as low as zero. Why is an 'expansionary gap' sometimes referred to as an 'inflationary gap'? Refer to the following figure to answer the questions that follow. (a) expansionary monetary policy that effectively removes the economy from a recessionary gap; (b) expansionary monetary policy that is destabilizing; (c) contractionary monetary policy that effectively removes the economy from an inflationary gap; and (d . 101010 people in your neighborhood or Transcribed Image Text: Suppose the demand for a product is P = 150-Q and that the marginal cost of producing the product is $30. The law is removed and replaced with another law. Refer to the following figure to answer the questions that follow. a. Calc. Many studies have examined the data on inflation and unemployment in or-der to estimate the cost of reducing inflation.The findings of these studies are of-ten summarized in a statistic called the sacrifice ratio.The sacrifice ratio is the number of percentage points of annual output lost in the process of reducing in-flation by 1 percentage point. Global economic interdependence make dollarization: less risky because El Salvador is more likely to be expecting the same economic conditions as those in the U.S. Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Don Herrmann, J. David Spiceland, Wayne Thomas, PTRS 704 Clinical Emergencies (final exam). The ABC Toy Company makes a few types of toy cars on one of its production line. Fiscal policy involves the use of _____ to influence _____. What is an example of an item that would fall under mandatory spending? The following table describes the aggregate demand curve, where real GDP is expressed as the percent deviation from potential GDP and inflation is expressed as a percentage: Real GDP 2.0 1.0 0.0 -1.0 -2.0 Inflation 0.0 X % 3.0 4.0 5.0 7.0 9.0 Due to a price shock, inflation increases by 2%. lower unemployment in the short run, higher inflation in the long run. The Federal Reserve announces that it will steadily raise the federal funds rate. Change in interest rate impacts the investment spending. B. Cost-push inflation is described as too much money chasing too few goods.. What are the main purposes of regulatory policies? The Federal Reserve determines monetary policy in the U.S. A fold in the surface of the cerebral cortex is called _________. A. What was Nixon's argument for not turning over the Watergate tapes? Beginning in January, a person plans to deposit $100\$ 100$100 at the end of each month into an account earning 6%6 \%6% compounded monthly. demandaggregate supply model? Which form of foreign aid involves many nations sharing a common goal and jointly contributing to a common fund? Bank of America Liabilities = Deposits - The ability to attract foreign direct investment Assume a required reserve ratio of 10%. Researchers announce that they anticipate a breakthrough in the effectiveness of training for low-skills workers within the next decade. Contractionary monetary policy is used to reduce inflation. A foreign entity holding cash is considered a leakage in the economy. Expert Answer. - The central bank decreases the discount rate. (Refer to Quizlet Guide Picture #1), What are the bank's reserves in Table 2? . Check out a sample Q&A here See Solution star_border Students who've seen this question also like: Consider the various actions listed below that can be taken by the Federal Reserve System. In spite of many bank failures, the people of (6) ________ did not want investors and banks to receive a gov. The Taylor rule helps the chairman to determine the target: Calc. Assume the economy is in a recession and the Federal Reserve takes the appropriate monetary policy actions. Executive privilege allowed him to withhold them. Required Reserve = ? Supply-side economic policies are sometimes referred to as: The central idea of supply-side economics is that certain types of tax cuts will increase: Which of the following policies would be supported by a supply-side economist? Which statement is true regarding regulations made by government agencies? - Oversees the buying and selling of gov. . Indicate whether each of the following would cause the Mexican peso to appreciate or depreciate. When supply shifts cause a downturn in the economy: monetary policy is much less likely to restore the economy to its pre-recession conditions. a. Select the proper policy recommendation or economic prediction for each of the following scenarios. - Provides info. Which statement best describes contractionary monetary policy? the results with the class. This entity enforces rules and laws related to the stock market. A. The new training method will allow these low-skill workers to quickly and cheaply acquire valuable skills that will then place them in better-paying jobs. Which phrase best defines the term lobbyist? Which of the following statements is TRUE of expansionary monetary policy during a recession? In the long run, as resource prices rise, the short-run aggregate supply curve shifts to the left, bringing the economy back to a long-run equilibrium where no real changes to GDP have occurred. When actual output exceeds its long-run potential, inflation is the result. Which of the following shows the affect of the monetary policy? What is the simple money multiplier? Monetary policy refers to the government's choices regarding purchases or taxation. True or False: Which form of communication currently plays the most immediate role in broadcasting politicians' positions on public policy? The European Central Bank, responsible for monetary policy within the European Union. As housing prices began to drop and the economy slowed, the . As people earn higher incomes, they pay more taxes. Which of these represents the federal government's first intervention in how U.S. businesses operate? (Refer to Quizlet Guide Picture # ) Contractionary monetary policy directly pulls money out of Injecting new money into the economy eventually causes: As the prices of goods and services decrease, the value of money: What did the Federal Reserve do in response to the Great Recession? Copper Which resource management agency would most likely set guidelines for oil pipelines and windmills? Literally trading one good for another without using money, A situation where two individuals each want some good or service that the other can provide, Whatever serves society in three functions: medium of exchange, store of value, and unit of account, Are these an example of commodity money or or fiat money: Bill, provided financial assistance to soldiers returning from World War II. Which of the following will a Keynesian economist most likely favor if the economy is operating at point a? Then write a response that suggests a way to deal with the situation. A contractionary policy is a tool used to reduce government spending or the rate of monetary expansion by a central bank to combat rising inflation. It includes currency in circulation, checking account deposits and travelers checks. - The amount of reserves banks are required by law to hold. It conducted open market purchases to drive down interest rates. What is the leakage-adjusted money multiplier? The share of deposits that banks must have in reserves is the __________. M1 is the narrowest definition of the money supply. Consider the graphs, which show aggregate supply (AS) and the change in aggregate demand (AD) from AD1 to AD2 that will result from the monetary policies. In 1988, Australia introduced a commemorative $10 banknote made of plastic (polymer). The actual level of aggregate demand is less than the full employment level of output. Investment is a component of aggregate demand, so this shifts aggregate demand to the right. - Increases real GDP in the short run, Is not a result of contractionary monetary policy (tight money policy). - The Federal Reserve increases the percentage of deposits that commercial banks are required to keep in their vaults, Contractionary (restrictive) monetary policy, Classify the actions described as examples of expansionary monetary policy (intended to stimulate the economy), contractionary or restrictive monetary policy (meant to slow down the economy), or not an example of monetary policy. provides a larger incentive for firms to invest. Contractionary Monetary Policy. Experts are tested by Chegg as specialists in their subject area. True or False: Higher interest rates that decrease private investment. 3.. How would we describe an economy that corresponds to the following image? school about their attitudes toward risk. 2. increase Your are Chair of the Federal Reserve Board. A country's _GDP- Gross Domestic Product_ is the total value of all final goods and services its people produce in one year. In 2013, (1) _______ suffered from an unemployment rate of 25% and huge amounts of debt. True or False: What is the term for this? There is a declining interest among teenagers to pursue a career in science and health care (U.S. News & World Report, May 23, 2011). The Fed can _____________ the money supply by lowering this rate. The reserve requirement %5. Select the proper policy recommendation or economic prediction for each of the following scenarios. issues involve laws that are in some way unconstitutional.(Terrorism). You calculate that price elasticity of demand for this drug at the current market price is -1.4. d.) The unemployment rates are falling. The Federal Reserve sells bonds via the commercial banking system. (7) ________ remained in a recession longer than other nations due to very slow economic growth. The purpose of contractionary fiscal policy is to slow growth to a healthy economic level. The law is removed and replaced with another law. e. Contractionary monetary policy directly pulls money out of Assume of 8% reserve requirement in the U.S. and no money leakages: _________ indicates a short-run inverse relationship between inflation and unemployment rates. demandaggregate supply model? Suppose Robina Bank receives a deposit of $54,589 and the reserve requirement is %6. the left. Monetary policy is the domain of the U.S. Federal . However, everyone in the economy expects that exactly this amount (in present value) will have to be paid back in the future in the form of taxes. So, component of aggregate demand, so this shifts aggregate demand to The main contractionary policies employed. All of the following are examples of fiscal policy to lower unemployment, EXCEPT: Which of the following is a possible negative consequence of decreased taxes and increased government spending? Which of the following can change relatively quickly in the short run? Loans - Share this: Facebook Which of the following explains expansionary monetary policy in the long run? spending. Contractionary monetary policy is when a central bank uses its monetary policy tools to fight inflation. bailout. - The central bank uses open market operations to conduct expansionary monetary policy. What does the Tenth Amendment have to do with American federalism? component of aggregate demand, so this shifts aggregate demand to - Engaging in fiscal policy Question: 90. Which of the following is true regarding the effects of an expansionary monetary policy? The New Deal, introduced by President Franklin D. Roosevelt, attempted to relieve the distress caused by Great Depression, which began with the stock-market crash of 1929. To counteract a recession, the Federal Reserve should: Buy securities on the open market and lower the discount rate. Change ($) = $50 million. President Lyndon B. Johnson created a set of programs that were known as the Great Society. 2015 6%. Expectations for the rest of the year, however, do not change. 1. - A reduction in the occurrences of rampant inflation, Suppose that you are employed as an advisor to the central bank. d. The New Deal, introduced by President Franklin D. Roosevelt, attempted to relieve the distress caused by Great Depression, which began with the stock-market crash of 1929. Classify each of the variables listed by the policy's short run effect upon them. The Federal Reserve, which maintains reserve banks across the United States, is responsible for monetary policy. In your meeting with the Federal Open Market Committee, the committee unanimously votes to increase the money supple using open market operations (OMOs). Dianne buys stock in Starbucks. Money can never lose its usefulness as a unit of account. Suppose the table below lists the actual annual inflation rates for 2010 to 2015. Inflation is a sign of an overheated economy. The choices offered in the questionnaire are science, business, and other. Which phrase best defines the term policy? Why? Holding all else constant, in the short run, a decrease in the money supply can cause: a decrease in real gross domestic product (GDP). Determine whether or not the value of the good or service la each of the transactions. Consider the graphs, which show aggregate supply (AS) and the change in aggregate demand (AD) from AD1 to AD2 that will result from the monetary policies. True or False: c. Section 11(c) of the OSH Act. If the supply of money decreases, what happens in the money market? What was one outcome of the G.I. Suppose you win on a scratch-off lottery ticket and you decide to put all of your $3,500 winnings in the bank. How does it affect the accounting equation? Contractionary fiscal policy is used to offset which of the following? b.) 2014 6% Consider the impact of monetary policy over time. The short run effects of quantitative easing are a(n) ________ in the price level with a long run ________ in the real value of money. Which of these represents the federal government's first intervention in how U.S. businesses operate? Spain When there is a downside gap between actual equilibrium, real GDP, and the full-employment level of real GDP, what do economists call this? Option C Due to expansionary monetary policy, LM curve would shift to right leading to decrease in market interest rate . Which public health and safety agency would be most likely to investigate the safety of a new over-the-counter medicine? The National Economy and You Module Note Guide Ups and Downs The business cycle has _four_ phases. Which of the following would be LEAST likely to occur during an expansionary gap? Which of the following ensures the right of workers to seek safety and health on the job without fear of punishment? Expansionary monetary policy shifts aggregate demand to the right, moving the economy from long-run equilibrium to a short-run equilibrium with a higher price level and a higher level of real GDP. Banks in Ruritania have a required reserve ratio of 5%. I love you Bubbas. 4. increase His pennies total $5000. Economic models define global . Which of the following is NOT an example of an automatic stabilizer? - Demand for loanable funds, Suppose that a central bank pursues expansionary monetary policy by purchasing bonds. Which approach to fiscal policy involves and increase in taxation and decrease in spending? Which panel in the figure below best describes the situation in each of (a)-(d)? If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent. When the Fed buys bonds, bank reserves (4) __________, which reduces the need for banks to borrow. Identify the three tools of monetary policy, and what the Fed would do to increase (or decrease) the (growth of the) money supply. Monetary policy works faster than fiscal policy. A perfectly competitive firm will maximize profits when the b. marginal revenue is lower than average variable cost. Expansionary; recessionary; contractionary; inflationary. True or False: In the U.S., banks keep the entire value of all customer deposits in the bank vault to meet customer withdrawals. The gov. According to Keynesian economists, why do recessions occur? Given that the US dollar has depreciated, the aggregate demand in the united states should ____. This raises the interest rate, which provides a lesser incentive for firms to invest. - The Federal Reserve purchases bonds on the open market - The Federal Reserve decreases the discount rate Which earlier social engineering program directly influenced Johnson's initiatives? (43) - Engaging in monetary policy, Classify each of the tasks according to whether or not they are tasks of the Federal Reserve. Which statement best describes contractionary monetary policy? It involves a change in the size of the money supply. someone who tries to influence the government in an organized way. B. a cyclical downturn in the economies of primary trading partners. Correct Answer: $900 Question 12 A decrease in the discount rate would: Correct Answer: increase bank borrowing of reserves and reflect an expansionary monetary policy. Expansionary monetary policy directly puts money into the loanable funds market. Higher interest rates resulting from borrowing to conduct expansionary fiscal policy. securities, which increases the amount of reserves in the banking systems and fuels deposit expansion. Question 13 A system where goods and services are exchanged directly without a common unit of account is called the: Correct Answer: barter system. How will real GDP and the price level be affected? Which of the statements describes an implication of this equation in the long run? Question 14 Contractionary . A new technology is discovered that promises an increase in cheap computing power in the future. Banks in Ruritania have a required reserve ratio of 5%. . Expansionary monetary policy is simply a policy which expands (increases) the supply of money, whereas contractionary monetary policy contracts (decreases) the supply of a country's currency. In the long run, the decrease in the money supply will cause the price level in the economy to __________ and real GDP to ___________. a type of fiscal policy that automatically kicks in without the discretion of policymakers. Fiscal policy deals with the money supply, while monetary policy deals with the budget. What is the value of this expansionary gap? b. Calc. Phil Frugal has been saving his pennies since he was five years old. What specific group takes responsibility for the actions? Which statement about executive orders is accurate? 1. a. According to the permanent income hypothesis, which situations would result in an immediate increase in consumer spending, which would result in an immediate decrease in consumer spending, and which would result in no change in consumer spending?
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