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devry ECON-312 week 5 quiz

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Question;(TCO 6) Expansionary fiscal policy is so named because it Student Answer: involves an;expansion of the nation's money supply. necessarily expands the size of government. is aimed at achieving greater price stability. is designed to expand real GDP. Instructor Explanation: Chapter 30. Points Received: 1 of 1 Comments: Question 2. Question;(TCO 6) Suppose that the economy is in the midst of a;recession. Which of the following policies would most likely end the recession;and stimulate output growth? Student Answer: A Congressional;proposal to incur a Federal surplus to be used for the retirement of public;debt. Reductions in agricultural subsidies and;veterans' benefits. Postponement of a highway construction;program. Reductions in Federal tax rates on personal;and corporate income. Instructor Explanation: Chapter 30. Points Received: 1 of 1 Comments: Question 3. Question;(TCO 6) The crowding-out effect of expansionary fiscal;policy suggests that Student Answer;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. Instructor Explanation: Chapter 30. Points Received: 1 of 1 Comments: Question 4. Question;(TCO 5) The determinants of aggregate supply Student Answer: are consumption;investment, government, and net export spending. explain why real domestic output and the price;level are directly related. explain the three distinct ranges of the;aggregate supply curve. include resource prices and resource;productivity. Instructor Explanation: Chapter 29. Points Received: 1 of 1 Comments: Question 5. Question;(TCO 6) Menu costs Student Answer: increase during;recession. IN decrease during recession. are the costs to firms of changing prices and;communicating them to customers. are sunk costs and therefore should be;disregarded. Instructor Explanation: Chapter 29. Points Received: 0 of 1 Comments: Question 6. Question;(TCO 6) The MPC can be defined as that fraction of a Student Answer: 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. Instructor Explanation: Chapter 27. Points Received: 1 of 1 Comments: Question 7. Question;(TCO 6) The size of the MPC is assumed to be Student Answer: less than zero. greater than one. greater than zero, but less than one. two or more. Instructor Explanation: Chapter 27. Points Received: 1 of 1 Comments: Question 8. Question;(TCO 5) Refer to the graph. Which of the following factors;will shift AD1 to AD3? Graph Description Student Answer: An increase in;expected returns on investment An increase in productivity A decrease in real interest rates A decrease in consumer wealth Instructor Explanation: Chapter 29. Points Received: 1 of 1 Comments: Question 9. Question;(TCO 6) The multiplier can be calculated as: Student Answer: 1/(MPS + MPC). MPC/MPS. 1/(1 - MPC). 1 - MPC = MPS. Instructor Explanation: Chapter 27. Points Received: 1 of 1 Comments: Question 10. Question;(TCO 5) The American Recovery and Reinvestment Act of 2009 Student Answer: IN;created a $700 billion rescue package for financial institutions. cut taxes by $152 billion, distributed;primarily as rebate checks to taxpayers. implemented a $787 billion package of tax cuts;and government expenditure increases. substantially lowered interest rates in an;attempt to stimulate investment spending. Instructor Explanation: Chapter 30. Points Received: 0 of 1 Comments: Question 11. Question;(TCO 5) What effect would each of the following have on;aggregate demand or aggregate supply? Explain.a. A reduction in personal income taxb. An increase in payroll taxes paid by the employerQuestion 12. Question;(TCO 6) How can the government use different fiscal policies;to [a] lower unemployment and [b] reduce inflation?="msonormal">

 

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