Can34L1

  • 1

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

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

  • 2

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

    budget policy
    fiscal policy
    AS-AD policy
    government policy

  • 3

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

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

  • 4

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

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

  • 5

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    A fixed rule policy specifies ____________________.

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

  • 6

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    A feedback-rule policy ______________.

    can be automatic
    increases aggregate demand
    is independent of the economic state
    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
    discretionary
    expected
    feedback

  • 8

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

    monetarist
    Keynesian
    central bank economist
    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 ________________.

    fixed-rule economist
    supply-side economist
    Keynesian activist
    monetarist

  • 10

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    Nominal GDP targeting ___________________.

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

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