According to the Keynesian model, the optimal fiscal policy is to a. increase cyclical but not structural deficits during a recession. b. reduce cyclical and structural deficits during a recession. c. increase structural deficits during an recession. d. maintain a balanced budget in case of national emergency. ANSWER A
Date: September 10th, 2020
Traditional Keynesians tend to favor a. monetary policy over fiscal policy because of the effectiveness of central banks. b. monetary policy over fiscal policy because it reduces interest rates.. c. fiscal policy over monetary policy because it doesn’t impact interest rates. d. fiscal policy over monetary policy because of the liquidity trap. e. none of […]
Date: September 10th, 2020
The slowdown in U.S. economic growth in the period 1974-95 was primarily caused by ________. A) falling labor growth B) falling capital growth C) falling productivity growth D) none of the above ANSWER C
Date: September 10th, 2020
During the postbellum period of U.S. history, (a) the U.S. balance of payments experienced a deficit throughout the entire period. (b) manufacturing exports became the top foreign exchange earner. (c) cotton exports continued to be the top foreign exchange earner. (d) the U.S. never borrowed from foreigners. ANSWER (c)
Date: September 10th, 2020
According to Ricardian Equivalence theory, a tax cut ________. A) will tend to have little economic effect B) will tend to reduce the magnitude of the trade-off between inflation and the rate of unemployment C) can be an effective policy tool in the midst of an economic downturn D) must be used in conjunction with […]
Date: September 10th, 2020
Bonds sales to finance World War II (1941–45) (a) helped finance the government’s current budget deficits. (b) helped finance, manage and eventually pay down the private debts accumulated during World War I (1914–18). (c) were loans the U.S. government made to individuals in its private sector. (d) led to higher interest rates and decreased private […]
Date: September 10th, 2020
The Second Bank of the United States was deemed unconstitutional and, therefore, its charter was not renewed. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
After World War II (1941–45), the U.S. public debt (a) remained unchanged in 1947 even though the government ran a budget surplus (government expenditures fell below revenues in 1947). (b) continued to rise even though the government ran a budget surplus at times. (c) decreased even though the government ran a budget surplus continuously. (d) […]
Date: September 10th, 2020
The colonies traded internationally with regions other than the United Kingdom. They included all except (a) Africa (b) China (c) West Indies (d) Southern Europe ANSWER (b)
Date: September 10th, 2020
According to the classical system, saving is a function of a. income. b. the real interest rate. c. the real wage. d. the profitability of firms. e. all of the above. ANSWER B
Date: September 10th, 2020
