Reference no: EM1361819

33)
If Congress prefers to reduce spending, rather than raise taxes, in an effort to reduce the budget deficit, what should the Fed do to keep GDP and employment stable?
a) increase the money supply b) decrease the money supply c) maintain the same money supply
d) money supply and employment are unrelated e) none of the above

34)
If rebuilding after a natural disaster causes government spending to increase substantially, what should the Fed do to keep interest rates stable?
a) increase the money supply b) decrease the money supply c) maintain the same money supply
d) money supply and interest rates are unrelated e) none of the above

35)
If Congress reduces spending in an effort to reduce the budget deficit, what should the Fed do to keep interest rates stable?
a) increase the money supply b) decrease the money supply c) maintain the same money supply
d) money supply and interest rates are unrelated e) none of the above

36)
If there is a crisis in morality in which the public uses more cash for illegal transactions, what should the Fed do to keep interest rates stable?
a) increase the money supply b) decrease the money supply c) maintain the same money supply
d) money supply and interest rates are unrelated e) none of the above

37)
Monetary policy influences the following components of GDP, except
a) consumption b) investment c) government spending d) net exports e) none of the above

38)
Today's inflation rate is most influenced by
a) today's money supply growth b) yesterday's money supply growth c) tomorrow's money supply growth d) money supply growth and inflation are unrelated e) none of the above

39)
Problematic inflation is caused by
a) high government spending b) high taxes c) high interest rates d) high money supply growth
e) all of the above

40)
The US is one of the countries where the government cannot finance a budget deficit by
a) borrowing b) issuing new currency c) issuing old currency d) selling bonds e) none of the above