Monetarism

97. The monetarist program undertaken during the 1979-1982 period resulted in: A) a reduction in the inertial rate of inflation. B) a dramatic rise in unemployment. C) very high interest rates. D) all of the above. E) none of the above.

Gov't Debt expansion

103. The expansion of the government debt could result in: A) a decline in savings. B) an increase in interest rates. C) a decline in investment. D) a reduction in the capital stock. E) all of the above.

Reaganomics

112. How was the Reagan administration able to have a large defense buildup without inflation? A) The administration raised taxes to finance the increased expenditures on defense. B) An increase in personal saving financed the buildup. C) The administration's goal was helped by the Fed's tight-money policy. D) Wage ...continues

Fighting Inflation

109. All the following are policies that might be used to curb an inflationary trend, with the exception of: A) an increase in personal tax rates. B) an increase in the federal deficit. C) an increase in the reserve requirements of banks. D) a reduction in government spending. E) all of the above, with no except ...continues

Classical Theory

85. A classical economist spends a good deal of time worrying that: A) policies will overshoot their output marks and can therefore never move GDP closer to its potential. B) government spending will crowd private spending and investment out of the market. C) stabilization policy is never sufficiently "fine-tuned." ...continues

Expenditure Approach to GDP

(Expenditure Approach to GDP) Given the following annual information about a hypothetical country, answer questions a through d. Billions of Dollars Personal consumption expenditures $200 Personal Taxes 50 Exports 30 Depreciation 10 Government Purchases 50 Gross private domestic investment 40 Imports 40 Governm ...continues

Measuring Unemployment

Measuring Unemployment Determine the impact on each of the following, if 2 million formerly unemployed workers decide to return to school full time and stop looking for work: a. The labor force participation rate. b. The size of the labor force. c. The unemployment rate.

US GDP

Determine whether each of the following would be included in the 2002 U.S. gross domestic product: a. Profits earned by Ford Motor Company in 2002 on automobile production in Ireland. b. Automobile parts manufactured in the United States in 2002 but not used until 2003. c. Social Security benefits paid by the U.S. governm ...continues

Quantity Theory of Money

Do you believe the Quantity Theory of Money is true? Explain your answer with at least one Monetary Observation.

AS/AD model

What are some measures of total ouput on the horizontal axis of the AS/AD model? Which measure do you think represents the most accurate picture of the output of an economy? why?