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Inflation, Business Cycles, Monetary Policy, Federal Budget, Fiscal Policy, Political Economy Flashcards | StudBud
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Inflation, Business Cycles, Monetary Policy, Federal Budget, Fiscal Policy, Political Economy
Inflation, Business Cycles, Monetary Policy, Federal Budget, Fiscal Policy, Political Economy
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Macroeconomics Final Exam Review
Flashcards
36 cards
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Questions
36
Answers
1
Which of the following is not one of the major sources of government revenue?
Corporate Income Tax
Estate Tax
Individual Income Tax
Social Security Tax
2
A decrease in the money supply will do what in the short-run?
decrease inflation and decrease unemployment
decrease inflation and increase unemployment
increase inflation rate and decrease unemployment
increase inflation and increase unemployment
3
The K% rule favored
a rule of 3% money growth to cause price stability
a rule of 3% velocity growth to cause price stability
a rule of 3% inflation growth to cause price stability
a rule of 3% RGDP growth to generate price stability
4
Which of the following would not shift the Aggregate Demand Curve?
Increase in Money Supply
Sticky Wages
Decrease in Consumer Spending
Increase in Government Spending
5
Which of the following is not one of the major expenditures of the federal government?
Social Security
Interest on the Debt
National Defense
Foreign Aid
6
A postive AD shock
decrease inflation and decrease RGDP growth
increase inflation and decrease RGDP growth
decrease inflation and decrease RGDP growth
would increase inflation and increase RGDP growth
7
A recession is characterized by
High RGDP growth, falling unemployment
High RGDP growth, rising unemployment
Low RGDP growth, falling unemployment
Low RGDP growth, rising unemployment
8
Which of the following is not a difficulty associated with monetary policy?
Data Lag
Incomplete control over money supply
Crowding Out
9
Which of the following is not a limitation of fiscal policy?
Incomplete Control over money supply
Timing
debt crisis
Crowding Out
10
Country A has GDP $20 trillion and holds debt of $10 trillion. Debt to GDP ratio =
500%
50%
200%
20%
11
The two methods of expansionary fiscal policy are
decreased government spending and decreased taxes
increased government spending and increased taxes
increased government spending and decreased taxes
decreased government spending and increased taxes
12
When benefits of acquiring information < costs of acquiring information, there is,
government failure
rationally ignorant public
rational informed public
market failure
13
Bonus*** Which of my relatives do you like best?
Cousin Steve who haunts the casita and reminds to marry rich
Baby Michael. First name: Baby. Last name: Michael
My two year old half Filipino brother Ali G.
Teta who is 99 years old, weighs 99 pounds, drinks 99 proof
14
Which of the following is least likely to be considered a public good?
Police
Asteroid Protection
Medical Care
National Defense
15
The best case for expansionary fiscal policy occurs
When the recession is due to a fall in aggregate demand
When in need of a short-run boost at expense of long-run
When there are unemployed resources
all of the above
16
A negative AD shock would
increase inflation and decrease RGDP growth
decrease inflation and decrease RGDP growth
increase inflation and increase RGDP growth
decrease inflation and increase RGDP growth
17
Which of the following are problems w/ relying on governments to provide public goods?
Perverse political incentives which result in over-supply
All of the above
Knowledge Problem- Government doesn't know optimal quantity
Turn free riders into forced riders
18
M1 =
Reserves+ Checkable Deposits
Currency + Reserves
Currency + Checkable Deposits + Savings
Currency + Checkable Deposits
19
Calculate Average tax rate for a single filer making 30,000 per year.
14.73%
15%
13.46%
10%
20
Which of the following is a recipe for political failure?
Dispersed benefits and dispersed costs
Concentrated benefits and concentrated costs
Dispersed benefits and concentrated costs
Concentrated benefits and dispersed costs
21
Which of the following is not considered money?
Checkable Deposits
Comic Book Collection
Currency
Savings
22
Which of the following is not a difference between monetary policy and fiscal policy?
Fiscal Policy attempts to influence macro performance
Fiscal Policy uses the federal budget as it's means
Fiscal Policy is conducted by congress
23
Which of the following is not a cost of inflation?
Price Confusion
Increased Budget Deficit
Costly to Stop
Breakdown of Financial Intermediation
24
A negative real shock would
decrease RGDP growth and decrease inflation
increase RGDP growth and decrease inflation
decrease RGDP growth and increase inflation
increase RGDP growth and increase inflation
25
A Public good is, by definition,
A good which is produced by the government
A good which is rivalrous and excludable
A good which is rivalrous and non-excludable
A good which is non-rivalrous and non-excludable
26
An open market purchase will result in which of the following in the short-run?
Lower Unemployment
Higher inflation
Lower Interest Rates
All of the Above
27
A budget deficit is
When federal expenditures>federal revenues
The amount the federal government has borrowed from public
When federal revenues> federal expenditures
When the federal reserve prints too much money
28
An open market purchase occurs when
Fed sells T-Bills to banks in order to shrink money supply
Fed buys T-Bills off banks in order to shrink money supply
Fed buys T-Bills off banks in order to expand money supply
Fed sells T-Bills to banks in order to increase money supply
29
The SRAS curve shows
a positive relationship between unemployment and RGDP growth
a negative relationship between RGDP growth and inflation.
a positive relationship between RGDP growth and inflation
No relationship between RGDP growth and inflation
30
What is a free rider?
Someone who doesn't receive benefits and pays share of costs
One who doesn't receive benefits and doesn't pay share
Someone who receives benefits and pays share of costs
Someone who receives benefits w/o paying share of costs
31
An increase in the money supply may
decrease AD and decrease RGDP
increase AD and decrease RGDP
decrease AD and increase RGDP
increase AD and increase RGDP
32
The Federal Reserve targets which of the following interest rates?
The Federal Treasury Rate
The Federal Funds Rate
The Federal Insurance Rate
The Federal Reserve Rate
33
The reserve ratio of the banks= 0.2, T-Bill purchases =1,000. What is change in money supply?
5,000
2,000
1,000
50,000
34
Which of the following is not an example of a real shock?
Change in Spending
Price of Oil
War
Weather
35
The reserve ratio of the banks= 0.2 Fed T-Bill purchases =1,000. What is Money Multiplier?
2
1/5
1/2
5
36
The Fed has the most control over
M2
M3
M1
Monetary Base
