Holt McDougal Economics Chapter 15.1: What Is Fiscal Policy? Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. How would the philosophy of new classical economists be described?

Question 2 2. How do automatic stabilizers benefit the economy?

Question 3 3. Jane is a presidential adviser in the time of the 2008 Global Economic Crisis. The president is asking her if he should use fiscal policy in an attempt to combat the effects of the crisis. Why does she likely tell him yes?

Question 4 4. How does a progressive tax code affect consumers?

Question 5 5. If the supply of money decreases, what happens in the money market?

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Question 6 6. Why can recognition lag occur?

Question 7 7. What does the theory of Rational Expectations attempt to explain?

Question 8 8. An economy is facing moderate output growth but significantly high inflation rates. Which of the following policy actions can the Federal Reserve use to address this problem?

Question 9 9. Which of the following should the government use when it wants to increase demand for goods?

Question 10 10. How do lag times differ between monetary policy implementation and fiscal policy implementation?

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Question 11 11. How can the rational expectations theory be applied to the labor market and the government's role in employment levels?

Question 12 12. If the supply of money increases, what happens in the money market?

Question 13 13. How could monetary policy lower inflationary expectations?

Question 14 14. All other things equal, which of the following monetary policies would be used to increase exports?

Question 15 15. The federal government's use of taxation and spending policies to affect overall business activity is called _____.

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Question 16 16. An automatic stabilizer is BEST defined as _____.

Question 17 17. Which of the following statements is NOT true regarding fiscal and monetary policy?

Question 18 18. If a nation is operating at full employment and the central bank engages in contractionary monetary policy, how will the interest rate and the unemployment rate change?

Question 19 19. The expansionary monetary policy is designed to:

Question 20 20. Which of the following is an example of contractionary monetary policy?

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Question 21 21. How do automatic stabilizers affect the government's budget during an economic recession?

Question 22 22. Which of the following is NOT an example of an automatic stabilizer?

Question 23 23. In which of the following scenarios would it be a good idea for the government to implement a deflationary fiscal policy?

Question 24 24. How does the theory of rational expectations relate future economic outcomes to the behavior of those making market decisions?

Question 25 25. What is a policy lag?

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Question 26 26. Which of the following statements is TRUE of expansionary monetary policy during a recession?

Question 27 27. Assume the economy is in a recession and the Federal Reserve takes the appropriate monetary policy actions. Which of the following shows the affect of the monetary policy?

Question 28 28. To counteract a recession, the Federal Reserve should:

Question 29 29. In general, because of policy lags, which of the following is true?

Question 30 30. Jim owns a custom printing business. According to the theory of rational expectations, how would he reach a decision about whether to expand his business in the next year?

Holt McDougal Economics Chapter 15.1: What Is Fiscal Policy? Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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