In the short-run macro model, an open-market purchase of bonds by the Fed will
a. raise the interest rate, reduce spending, and increase output
b. raise the interest rate, reduce spending, and decrease output
c. lower the interest rate, reduce spending, and decrease output
d. lower the interest rate, increase spending, and decrease output
e. lower the interest rate, increase spending, and increase output
E
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Which of the following macroeconomic variables is the most seasonally procyclical?
A) Expenditure on services B) The unemployment rate C) Expenditure on durable goods D) The real wage
Which of the following does the crowding-out effect stress?
What will be an ideal response?
Which of the following is most representative of the functional finance view of the macroeconomy?
A. Budgets should be balanced. Doing otherwise is morally wrong. B. The government should decide on tax and spending plans based on their effects on the economy. C. The economy is self-regulating and the best thing the government can do to enhance stability is to stay out of the way. D. Crowding out almost completely cancels out any deficit spending, so fiscal policy is likely to be ineffective.
The financial crisis and recession which began in 2007:
A. impacted only high-income countries. B. did not impact the United States. C. impacted many countries in the world. D. impacted only low-income countries.