EU32L1

  • 1

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    The goals of macroeconomic policy include all the following except _____________.

    maintain low interest rates
    maintain low inflation
    smooth out avoidable business cycle fluctuations
    maintain low unemployment

  • 2

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    Influencing aggregate demand and aggregate supply by changing tax rates and government purchases of goods and services is called ________________.

    fiscal policy
    government policy
    budget policy
    AS-AD policy

  • 3

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    Monetary policy is the adjustment of the _______ to achieve macroeconomic objectives.

    inflation rate
    stock market
    quantity of money in circulation and interest rates by the central bank
    tax rates, which changes the quantity of money in circulation

  • 4

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    The long-term economic growth rate will increase if there is __________________.

    more spending on health care
    more consumption with no change in income
    fewer places offered at university and more on-the-job training
    an increase in the after-tax rate of return on saving

  • 5

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    A fixed-rule policy specifies ____________________.

    which action occurs because of the economic state
    how policy should respond to high unemployment rates
    only the growth rate of money
    which action is to occur independently of the economic state

  • 6

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    A feedback-rule policy ______________.

    is independent of the economic state
    is only used when there is a demand shock to the economy
    increases aggregate demand
    can be automatic

  • 7

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    Policy that uses all available information, including perceived lessons from past "mistakes" is called _____________.

    rational
    expected
    feedback
    discretionary

  • 8

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    An economist who follows the rule that neither fiscal policy nor monetary policy responds to a depressed economy is a ________________.

    monetarist
    Keynesian
    central bank economist
    feedback economist

  • 9

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    An economist who follows the rule that government purchases of goods and services increase, taxes decrease, and money supply increases when real GDP falls below its long-run level is a ________________.

    fixed-rule economist
    Keynesian activist
    monetarist
    supply-side economist

  • 10

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    Nominal GDP targeting ________________.

    increases inflation
    uses feedback rules
    uses fixed rules
    decreases time lags between identification of the need to change aggregate demand and result of policies