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1. For a given level of government spending, the federal government usually experiences a budget____during economic____and a budget ______during economic_______.
2. Suppose that elected officials and the central bank agree to combine fiscal and monetary policies to lessen the threat of inflation. Which of the following combinations would likely accomplish this goal?
FISCAL POLICY MONETARY POLICY
3. Congress has embarked on another round of expansionary fiscal policy to boost employment and get reelected. As chair of the central bank, how would you reduce the "crowding-out" effect and what macroeconomic problem might your policy exacerbate?
4. Which of the following is likely to shift the long-run aggregate supply curve to the right?
5. Holding all else equal, which of the following monetary policies would be used to boost U.S. exports?
6. Which of the following could limit the ability of a central bank to conduct expansionary monetary policy?
7. Which of the following is a predictable advantage of expansionary monetary policy in a recession?
8. Suppose the economy is in long-run equilibrium when a temporary expansionary supply shock is felt in the economy. This changes the short-run Phillips curve, the short-run unemployment rate, and the long-run unemployment rate in which of the following ways?
SHORT-RUN PHILLIPS CURVE SHORT-RUN UNEMPLOYMENT LONG-RUN UNEMPLOYMENT
9. As the Japanese economy expands, in what ways do U.S. net exports, the values of the dollar and the yen change?
U.S. NET EXPORTS VALUE OF DOLLAR VALUE OF YEN
10. Suppose the President plans to cut taxes for consumers and also plans to increase spending on the military. How does this affect real GDP and the price level?
11. U.S. dollars and the European Union's (EU's) euro are exchanged in global currency markets. Which of the following is true?
12. If in a given year the government collects more money in net taxes than it spends, there would exist
13. Which component of a nation's balance of payments recognizes the purchase and sale of real and financial assets between nations?
14. An import quota on foreign automobiles is expected to
15. When a large increase in aggregate demand has an even greater increase in real GDP, economists refer to this as