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devry Eco312 week 5 quiz




Question;Question;1.1.(TCO;6) Expansionary fiscal policy is so named because it (Points: 1);involves an expansion of the;nation's money supply.necessarily expands the size of; aimed at achieving greater;price designed to expand real GDP.;Question;2.2.(TCO;6) An economist who favors smaller government would recommend (Points: 1);tax cuts during recession and;reductions in government spending during increases during recession;and tax cuts during cuts during recession and;tax increases during inflation.increases in government;spending during recession and tax increases during inflation.;Question;3.3.(TCO;6) The crowding-out effect of expansionary fiscal policy suggests that (Points: 1);government spending increases;at the expense of private investment.imports replace domestic;production.private investment increases at;the expense of government spending.saving increases at the expense;of investment.;Question;4.4.(TCO;5) An economy's aggregate demand curve shifts leftward or rightward by more;than changes in initial spending because of the (Points: 1);net export effect.wealth effect.real-balances effect.multiplier effect.;Question;5.5.(TCO;6) Menu costs (Points;1);increase during recession.decrease during recession.are the costs to firms of;changing prices and communicating them to customers.are sunk costs and therefore;should be disregarded.;Question;6.6.(TCO;6) The MPC can be defined as that fraction of a (Points: 1);change in income that is not;spent.change in income that is spent.given total income that is not;consumed.given total income that is;consumed.;Question;7.7.(TCO;6) Dissaving means (Points;1);the same thing as disinvesting.that households are spending;more than their current incomes.that saving and investment are;equal.that disposable income is less;than zero.;Question;8.8.(TCO;5) Refer to the graph. Which of the following factors will shift AD1 to;AD3?;Graph Description;(Points;1);An increase in expected returns;on investmentAn increase in productivityA decrease in real interest;ratesA decrease in consumer wealth;Question;9.9.(TCO;6) The practical significance of the multiplier is that it (Points: 1);equates the real interest rate;and the expected rate of return on investment.magnifies initial changes in;spending into larger changes in GDP.keeps inflation within;tolerable limits.helps to stabilize the economy.;Question;10.10.(TCO;5) The American Recovery and Reinvestment Act of 2009 was implemented;primarily to (Points;1);reduce inflationary pressure;caused by oil price increases.curb the overspending by;households that contributed to the Great Recession.bring the Federal budget back;into balance.stimulate aggregate demand and;employment.;Question;11.11.(TCO 5);What effect would each of the following have on aggregate demand or aggregate;supply? Explain.;a. A;widespread fear by consumers of an impending economic depression;b.;Labor Productivity (Output per man hour) goes up;(Points: 5);Question 12.12.(TCO 6) Explain how fiscal;policy (making changes to government spending and taxes) would affect;aggregate demand (AD). (Points;5)


Paper#57337 | Written in 18-Jul-2015

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