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Can you do this in an hour or less? 1. If people in countries

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Can you do this in an hour or less?
1. If people in countries that have had persistently high inflation are skeptical about efforts to reduce inflation, the short-run Phillips curve will remain far to the
left, and the sacrifice ratio will be low.
left, and the sacrifice ratio will be high.
right, and the sacrifice ratio will be low.
right, and the sacrifice ratio will be high.


2. If inflation falls it
causes people to put in more effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from lenders to borrowers.
causes people to put in more effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from borrowers to lenders.
causes people to put in less effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from lenders to borrowers.
causes people to put in less effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from borrowers to lenders.


3. Which of the following is not an argument by those who oppose tax-law changes to encourage saving?
Saving is not very responsive to changes in the tax rate.
Saving is not an important determinant of a nation's ability to produce output.
Reducing the budget deficit instead of changing the tax laws could raise saving.
Changes in the tax laws to induce saving would distribute the tax burden less fairly.


4. Policymakers following a "lean against the wind" policy would
increase government expenditures when output is low and decrease them when output is high.
increase government expenditures when output is low and do nothing when output is high.
decrease government expenditures when output is low and increase them when output is high.
decrease government expenditures when output is high and do nothing when output is low.


5. The national debt
exists because of past government budget deficits.
is the difference between the government's spending and revenue in a given year.
is the amount households owe on credit cards, mortgages and other loans.
is the same as the government's budget deficit.


6. Proponents of zero inflation argue that reducing inflation has
permanent costs and temporary benefits.
temporary costs and permanent benefits.
permanent costs and benefits.
temporary costs and benefits.


7. Other policies that reduce the incentive for households to save include
means-testing.
College and university financial aid administration.
inheritance taxes.
All of the above.


8. President George W. Bush and congress cut taxes and raised government expenditures in 2003. According to the aggregate supply and aggregate demand model
both the tax cut and the increase in government expenditures would tend to increase output.
only the tax cut would tend to increase output.
only the increase in government expenditures would tend to increase output.
neither the tax cut nor the increase in government expenditures would tend to increase output.


9. The discussion in this chapter should
make you a better participant in our national debates.
make it easy to choose between policy alternatives.
mislead you into political discussions.
show you the benefits but not the costs of policy options.


10. Social Security and government health-insurance programs account for
less than 2% of the federal spending.
5.2% of federal spending.
42% of federal spending.
52% of federal spending.


11. If there is a political business cycle and the Federal Reserve supports the incumbent, then we should expect that prior to elections
interest rates and output would rise.
interest rates would rise and output would fall.
interest rates would fall and output would rise.
interest rates and output would fall.


12. In general, the longest lag for
both fiscal and monetary policy is the time it takes to change policy.
both fiscal and monetary policy is the time it takes for policy to affect aggregate demand.
monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand.
fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand.


13. Means-tested programs tend to favor
those with high income as would a consumption tax.
those with high income while a consumption tax would favor those with low income.
those with low income as would a consumption tax.
those with low income while a consumption tax would favor those with high income.


14. Part of the argument against deficits is that they
increase interest rates and investment.
increase interest rates and decrease investment.
decrease interest rates and investment.
decrease interest rates and increase investment.


15. Which of the following likely occurs when households and firms are pessimistic?
Increased spending.
Increased aggregate demand.
Submitted: 1 year ago.
Category: Homework
Expert:  Eric M. replied 1 year ago.
Hey! I'll be happy to help. I'm working on these right now and should have them done shortly.
Customer: replied 1 year ago.

Hi how many Q's showed up? There is a total of 50























1. If people in countries that have had persistently high inflation are skeptical about efforts to reduce inflation, the short-run Phillips curve will remain far to the




left, and the sacrifice ratio will be low.
left, and the sacrifice ratio will be high.
right, and the sacrifice ratio will be low.
right, and the sacrifice ratio will be high.



 
















2. If inflation falls it




causes people to put in more effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from lenders to borrowers.
causes people to put in more effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from borrowers to lenders.
causes people to put in less effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from lenders to borrowers.
causes people to put in less effort to keep money balances low. When inflation is unexpectedly low it redistributes wealth from borrowers to lenders.



 
















3. Which of the following is not an argument by those who oppose tax-law changes to encourage saving?




Saving is not very responsive to changes in the tax rate.
Saving is not an important determinant of a nation's ability to produce output.
Reducing the budget deficit instead of changing the tax laws could raise saving.
Changes in the tax laws to induce saving would distribute the tax burden less fairly.



 
















4. Policymakers following a "lean against the wind" policy would




increase government expenditures when output is low and decrease them when output is high.
increase government expenditures when output is low and do nothing when output is high.
decrease government expenditures when output is low and increase them when output is high.
decrease government expenditures when output is high and do nothing when output is low.



 
















5. The national debt




exists because of past government budget deficits.
is the difference between the government's spending and revenue in a given year.
is the amount households owe on credit cards, mortgages and other loans.
is the same as the government's budget deficit.



 
















6. Proponents of zero inflation argue that reducing inflation has




permanent costs and temporary benefits.
temporary costs and permanent benefits.
permanent costs and benefits.
temporary costs and benefits.



 
















7. Other policies that reduce the incentive for households to save include




means-testing.
College and university financial aid administration.
inheritance taxes.
All of the above.



 
















8. President George W. Bush and congress cut taxes and raised government expenditures in 2003. According to the aggregate supply and aggregate demand model




both the tax cut and the increase in government expenditures would tend to increase output.
only the tax cut would tend to increase output.
only the increase in government expenditures would tend to increase output.
neither the tax cut nor the increase in government expenditures would tend to increase output.



 
















9. The discussion in this chapter should




make you a better participant in our national debates.
make it easy to choose between policy alternatives.
mislead you into political discussions.
show you the benefits but not the costs of policy options.



 
















10. Social Security and government health-insurance programs account for




less than 2% of the federal spending.
5.2% of federal spending.
42% of federal spending.
52% of federal spending.



 
















11. If there is a political business cycle and the Federal Reserve supports the incumbent, then we should expect that prior to elections




interest rates and output would rise.
interest rates would rise and output would fall.
interest rates would fall and output would rise.
interest rates and output would fall.



 
















12. In general, the longest lag for




both fiscal and monetary policy is the time it takes to change policy.
both fiscal and monetary policy is the time it takes for policy to affect aggregate demand.
monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand.
fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand.



 
















13. Means-tested programs tend to favor




those with high income as would a consumption tax.
those with high income while a consumption tax would favor those with low income.
those with low income as would a consumption tax.
those with low income while a consumption tax would favor those with high income.



 
















14. Part of the argument against deficits is that they




increase interest rates and investment.
increase interest rates and decrease investment.
decrease interest rates and investment.
decrease interest rates and increase investment.



 
















15. Which of the following likely occurs when households and firms are pessimistic?




Increased spending.
Increased aggregate demand.
Real GDP rises.
The unemployment rate increases.



 
















16. The principal lag for monetary policy




and fiscal policy is the time it takes to implement policy.
and fiscal policy is the time it takes for policy to change spending.
is the time it takes to implement policy. The principal lag for fiscal policy is the time it takes for policy to change spending.
is the time it takes for policy to change spending. The principal lag for fiscal policy is the time it takes to implement it.



 
















17. Part of the lag in monetary policy effects is due to




the long political process of monetary policy decisions.
precise economic forecasts.
the time required for firms and households to alter their spending plans.
changes in the unemployment rate.



 
















18. Suppose that the central bank is required to follow a monetary policy rule to stabilize prices. If the




increase the money supply, which causes output to move closer to its long-run equilibrium.
increase the money supply, which causes output to move farther from long-run equilibrium.
decrease the money supply, which causes output to move closer to its long-run equilibrium.
decrease the money supply, which causes output to move farther from long-run equilibrium.



 
















19. A program to reduce inflation is likely to have lower costs if the sacrifice ratio is




high, and the reduction is unexpected.
high, and the reduction is expected.
low, and the reduction is unexpected.
low, and the reduction is expected.



 
















20. The Fed lowered interest rates in 2001 and 2002. This implies, other things the same, that the Fed (Points : 5)




increased the money supply because it was concerned about unemployment.
increased the money supply because it was concerned about inflation.
decreased the money supply because it was concerned about unemployment.
decreased the money supply because it was concerned about inflation.



 
















21. Those who desire that policymakers stabilize the economy would advocate which of the following when aggregate demand is insufficient to ensure full employment?




Decrease the money supply.
Decrease taxes.
Decrease government expenditures.
Do nothing and let markets correct themselves.



 
















22. A balanced budget would require that when real GDP was growing rapidly,




the government raise taxes or cut expenditures. This would increase the magnitude of economic fluctuations.
the government raise taxes or cut expenditures. This would decrease the magnitude of economic fluctuations.
the government cut taxes or raise expenditures. This would increase the magnitude of economic fluctuations.
the government cut taxes or raise expenditures. This would decrease the magnitude of economic fluctuations.



 
















23. Time inconsistency will cause the




short-run Phillips curve to be higher than otherwise.
short-run Phillips curve to be lower the otherwise.
long-run Phillips curve to be farther to the right than otherwise.
long-run Phillips curve to be farther left than otherwise.



 
















24. Suppose that the country of Aquilonia has an inflation rate of about 2 percent per year and a real growth rate of about 1 percent per year. Suppose also that it has nominal GDP of about 200 billion units of currency and current nominal national debt of 150 billion units of domestic currency. Which of the following government spending and taxation figures will not raise the debt-to-income ratio?




government spending equal to 20 billion units and tax collections equal to 16 billion units
government spending equal to 20 billion units and tax collections equal to 14 billion units
government spending equal to 20 billion units and tax collections equal to 10 billion units
government spending equal to 20 billion units and tax collections equal to 8 billion units



 
















25. Which inflation costs could the government take actions to reduce without reducing inflation?




shoeleather and menu costs
menu costs and relative price variability
unintended changes in tax liabilities and arbitrary redistributions of wealth
None of the above is correct.



 
















26. If firms were faced with greater uncertainty because of concern that oil prices might rise, they might decrease expenditures on capital. In response to this change, someone who advocated "lean against the wind" policies might advocate




decreasing the money supply.
increasing taxes.
increasing government expenditures.
decreasing government expenditures.



 
















27. From the end of 2003 to the end of 2004, the United States ran a deficit of about $121 billion. The debt at the start of this period was about $3,924 billion. Which of the following combinations of inflation and real GDP would have allowed the government to run a deficit and kept the ratio of real GDP to the deficit about the same? (Points : 5)




about 1% inflation and about 1% real GDP growth
about 1% inflation and about 3% real GDP growth
about 2% inflation and about 1% real GDP growth
about 2% inflation and about 2% real GDP growth



 
















28. If a government managed to reduce the time inconsistency problem by mandating that the central bank target inflation at a low rate, then




the long-run Phillips curve would shift right.
the long-run Phillips curve would shift left.
the short-run Phillips curve would shift up.
the short-run Phillips curve would shift down.



 
















29. Proponents of zero inflation argue that a successful program to reduce inflation




eventually reduces inflation expectations.
eventually raises real interest rates.
permanently decreases output.
permanently raises unemployment.



 
















30. In 2008 the federal debt was




$17 billion.
$710 billion.
$5.2 trillion.



 
















31. If aggregate demand shifts because of a wave irrational exuberance, those who favor a policy that “leans against the wind” would advocate the ?




Federal Reserve increase the money supply or the government increase taxes.
Federal Reserve increase the money supply or the government decrease taxes.
Federal Reserve decrease the money supply or the government increase taxes.
Federal Reserve decrease the money supply or the government decrease taxes.



 
















32. An economist would be more likely to argue against reducing inflation if she thought that




the central bank lacked credibility and if bonds were usually not indexed for inflation.
the central bank lacked credibility and if bonds were usually indexed for inflation.
the central bank had credibility and if bonds were usually not indexed for inflation.
the central bank had credibility and if bonds were usually indexed for inflation.



 
















33. A program to reduce inflation is likely to have higher costs if the sacrifice ratio is




high, and the reduction is unexpected.
high, and the reduction is expected.
low, and the reduction is unexpected.
low, and the reduction is expected.



 
















34. Of means tested programs and IRA’s, which lower the rate of return on saving?




Both means-tested programs and IRA's.
Means-tested programs, but not IRA's.
IRA's but not means-tested programs.
Neither means-tested program, or IRA's.



 
















35. If the budget deficit were reduced




interest rates and investment would increase.
interest rates would increase and investment would decrease.
interest rates and investment would decrease.
interest rates would decrease and investment would increase.



 
















36. In the Summer of 2008, consumers indicated that they were less optimistic about the future of the economy. This change in sentiment would likely




shift aggregate demand to the right.
increase output.
increase unemployment.
increase prices.



 
















37. Which of the following is not an argument against requiring the government to balance its budget?




Some economists believe that rules are better than discretion.
Per-capita debt is small relative to lifetime income.
The effect of deficit spending on future generations depends in part on what the government buys.
Other government policies also redistribute income across generations.



 
















38. Double taxation means that both




wage income and interest income are taxed, which is currently the case in the United States.
wage income and interest income are taxed, which is not currently the case in the United States.
the profits of corporations and the dividends shareholders receive are taxed, which is not currently the case in the United States.
the profits of corporations and the dividends shareholders receive are taxed, which is currently the case in the United States.



 
















39. Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as




inflation targeting.
the monetary policy reaction lag.
the time inconsistency of policy.
the sacrifice ratio dilemma.



 
















40. Zero inflation




might be dangerous because it could lead to rapidly increasing prices.
would limit the flexibility of the labor market and so could at times raise unemployment.
would make it easy for the Central bank to create negative real interest rates.
is impossible to achieve in the real world.



 
















41. According to the political business cycle theory, if the Fed wanted to see a President re-elected, prior to the election it might




lower the discount rate and sell bonds.
lower the discount rate and buy bonds.
raise the discount rate and sell bonds.
raise the discount rate and buy bonds.



 
















42. Fluctuations in employment and output result from changes in




aggregate demand only.
aggregate supply only.
aggregate demand and aggregate supply.
neither aggregate demand nor aggregate supply.



 
















43. Some economists believe that there are positives from a little inflation and that it may “grease the wheels”




in the stock market.
in the foreign exchange market.
in the bond market.
in the labor market.



 
















44. The principal reason that monetary policy has lags is that it takes a long time for




changes in the interest rate to change aggregate demand.
changes in the money supply to change interest rates.
the Fed to make changes in policy.
the federal government to change the tax code.



 
















45. Inflation reduction has the lowest cost when the efforts are




credible so that the sacrifice ratio is low.
credible so that the sacrifice ratio is high.
unexpected so that the sacrifice ratio is high.
unexpected so that the sacrifice ratio is low.



 
















46. Which of the following is a cost of inflation?




shoeleather costs
menu costs
relative price variability
All of the above are correct.



 
















47. Paul Volcker's inflation reduction efforts




failed to reduce inflation.
failed to reduce expected inflation.
resulted in the highest unemployment rate since the Great Depression.
make him reviled by central bankers.



 
















48. The effects of a decline in the value of financial assets, such as stocks, on consumption and the economy might be offset by




increasing government spending.
decreasing the money supply.
increasing taxes.
undertaking no policy action.



 
















49. An opponent of monetary policy decisions by rule would point to which of the following as support of his case?




time inconsistency of policy
flexibility to confront unforeseen circumstances
political business cycle
the ability to craft rules that account for all possible contingencies in advance



 
















50. The political business cycle refers to )




the fact that about every four years some politician advocates greater government control of the Fed.
the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
the part of the business cycle caused by the reluctance of politicians to smooth the business cycle.
changes in output created by the monetary rule the Fed must follow.



 



 

Expert:  Eric M. replied 1 year ago.
Oh, only the first 15 showed up. I think I can still do all of them, but it'll be a rush to get them done that fast. I'll hurry!
Customer: replied 1 year ago.

I undersdtand Eric.Smile

Customer: replied 1 year ago.


Accruaracy and time is worth a great tip.

Expert:  Eric M. replied 1 year ago.
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Category: Homework
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Experience: 9 years of tutoring experience, Bachelor's and Master's in Computing, pursuing PhD
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