A political leader suggesting that an economic downturn will be cushioned automatically is referring to the automatic actions resulting from
A. interest rates and tax rates.
B. tax policy and spending policy.
C. a progressive income tax and a welfare state.
D. interest rates and the money supply.
Answer: C
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Which of the following is a problem in pursuing monetary policy?
A) The lag between a change in the quantity of money and its effect on economic activity may be long. B) The Fed must reveal to the public anytime the Fed changes its policy. C) Monetary policy must be approved by the Congress. D) The Fed cannot control the federal funds rate. E) None of the above answers is correct.
The fundamental force that drives international trade is
A) absolute advantage. B) importation duties and tariffs. C) export licenses. D) comparative advantage.
Out of the various types of M1 (demand deposits, coins and bank notes), only demand deposits
(a) can be used to generate loans by banks. (b) serve as a medium of exchange. (c) serve as a unit of account. (d) store value.
The new federal government's national health care program imposes the following regulations on health care insurers EXCEPT
A) health insurers must cover all who apply, including people who already have health problems. B) all new plans must cover certain preventive services such as mammograms and colonoscopies but must be paid 100% by patients. C) a ceiling is imposed on the rate of increase in health insurance prices charged to elderly people. D) insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays.