Reference no: EM1312673
Fiscal Policy
1. If the MPC in an economy is .8, government could shift the aggregate demand curve rightward by $100 billion by:
2. An appropriate fiscal policy for severe demand-pull inflation is:
Use the following to answer questions 3:
3. Refer to the above diagram, in which Qf is the full-employment output. If aggregate demand curve AD1 describes the current situation, appropriate fiscal policy would be to:
How Banks and Thrifts Create Money
4. If the reserve ratio is 15 percent and commercial bankers decide to hold additional excess reserves equal to 5 percent of any newly acquired checkable deposits, then the relevant monetary multiplier for the banking system will be:
Monetary Policy
5. Which of the following is correct? When the Federal Reserve buys government securities from the public, the money supply:
6. If the Federal Reserve authorities were attempting to reduce demand-pull inflation, the proper policies would be to:
7. If the economy were encountering a severe recession, proper monetary and fiscal policies would call for: