A. setting interest rates
B. managing the money supply
C. calculating the US gross domestic product
D. paying unemployment benefits
6) The federal reserve provides which of the following data
A. federal funds rate
B. stock price of GE
C. bond yields of corporation
D. debt to GDP of Ireland
7) Consider if the government instituted a 10% income tax surcharge. In terms of the AS/AD model this change should have
A. shifted the AD curve to the left
B. shifted the AD curve to the right
C. made the AD curve flatter
D. made the AD curve steeper
8) If the depreciation of a country’s currency increases it aggregate expenditures by 20, the AD curve will
A. shift right by more than 20
B. shift right by less than 20
C. shift right by exactly 20
D not shift at all
9) Aggregate demand management policies are designed most directly to
A. minimize unemployment
B. minimize inflation
C. control the aggregate level of spending in the economy
D. prevent budget deficits or surpluses
10) Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model
A. an increase in government spending
B. an increase in taxes
C. a reduction in government spending
D. no change in taxes or government spending.
11) According to Keynes, market economies
A. never experience significant declines in aggregate demand
B. quickly recover after they experience a significant decline in aggregate demand
C. may recover slowly after they experience a significant decline in aggregate demand
D. are constantly experiencing significant declines in aggregate demand
12) The laissez-faire policy prescription to eliminate unemployment was to
A. eliminate labor unions and government policies that hold real wages too high
B. strengthen unions and government regulations protecting unions and workers
C. increase real wages so that people are encouraged to work
D. have government guarantee jobs for everyone
