mac18L1

  • 1

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

    maintain little variation in the price level
    maintain low interest rates
    smooth out avoidable business cycle fluctuations
    maintain low unemployment

  • 2

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

    government policy
    fiscal policy
    budget policy
    AS-AD policy

  • 3

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

    stock market
    money market mutual funds
    quantity of money in circulation and interest rates
    Treasury bill rate

  • 4

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

    more spending on health care
    higher college costs
    an increase in the after-tax rate of return on saving
    more consumption with no change in income

  • 5

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    A fixed rule policy specifies ____________________.

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

  • 6

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    A feedback-rule policy ______________.

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

  • 7

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    Policy that uses all available information is called _____________.

    rational
    feedback
    discretionary
    expected

  • 8

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    An economist who believes that fluctuations in the money stock are the main source of economic fluctuation is a ________________.

    central bank economist
    Keynesian
    monetarist
    feedback economist

  • 9

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    Sam believes that an increase in aggregate demand and sticky wages are responsible for the current state of the economy. Sam is a ________________.

    monetarist
    fixed-rule economist
    Keynesian activist
    supply-side economist

  • 10

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    Nominal GDP targeting ___________________.

    uses fixed rules
    increases inflation
    uses feedback rules
    decreases time lags between implementation and result of policies

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