43. A policy that wa An expansionary ll c. A balanced policy d. An unbalanced po

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43. A policy that wa An expansionary ll c. A balanced policy d. An unbalanced policy 44. Compared to the Aggregate Expenditure model, the Agaregae model,the Aegregne demane/ Agregate Supply a. Cannot show changes in prices as well b. Ignores aggregate demand c. More clearly shows distinctions between the short run and long run d. All of the above are correct e. Both a and c are true 45. Monetary policy is a. The deliberate control of the money supply to achieve macroecononic goals b. Using the government's regulatory powers to improve c. The provision of public goods to improve economic efficiency d. Using government taxation and expenditure policies to achieve macroeconomic goals 46. If an economy is experiencing high unemployment as the result of delicient aggregate demand or deficient aggregate expenditures, which of the folo polcy almmatives wil monkey push the economy toward full employment? a. A tax cut coupled with an equal reduction in government expenditures b. An increase in government expenditures coupled with an increase in taxes c. An increase in tax rates, leaving government expenditures unchanged d. A tax cut coupled with an increase in government expenditures 47. Which of the following monetary measures would best complement fiscal measures designed to stimulate aggregate demand during a period of high unemployment? a. An increase in reserve requirements b. The purchase of bonds by the Federal Reserve c. An increase in the Fed's discount rate d· An increase in margin requirements necessary to buy stock 48. Assume that the government increases its purchases of goods and services. The ultimate efflect will be to a. Increase aggregate demand by the same amount as the increase in govemment purchases b. Increase aggregate demand by less than the increase in government purchasers c. Increase aggregate demand by more than the increase in govermment purchases d. Decrease aggregate demand 49. Automatic stabilizers are components of existing fiscal policies that tend to a. Work in the same direction as the economy b. Act to reinforce recessions c. Require policy adjustments d. Work such as to decrease spending when the economy overheats and increase spending when it contracts a. Involves a change in government defense spending b. Is triggered by the state of the economy C. Requires action by the Congress d involves a change in corporate tax rates 50. A discretionary fiscal policy is a fiscal policy that

Explanation / Answer

43. Ans: A contractionary policy

44. Ans: more clearly shows distinctions between the short run and long run.

Explanation:

Aggregate demand/aggregate supply model is advanced explanation the aggregate expenditures model with the inclusion of price changes in the short run and long run.

45. Ans: The delibarate control of the money supply to achieve macroeconomic goals.

46. Ans: A tax cut coupled with an increase in government expenditures.

47. Ans: The purchase of bonds by the Federal Reserve.

48. Ans: Increase aggregate demand by more than the increase in government purchases.

49. Ans: Work such as to decrease spending when the economy overheats and increase spending when it contracts.

50. Ans: Requires action by the congress

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