Governments may intervene in private markets through
A) rationing by political power.
B) price floors.
C) price ceilings.
D) all of the above.
Answer: D
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In a recessionary expenditure gap, the equilibrium level of real GDP is
A. greater than planned aggregate expenditures. B. greater than full-employment real GDP. C. less than planned aggregate expenditures. D. less than full-employment real GDP.
The government has decided to give every person in the U.S. a $5 coupon that they can use at the grocery store to purchase their choice of cheese. We would expect this policy to lead to
A) an increase in aggregate demand but not equivalent to the full impact of all of the coupons redeemed due to some direct expenditure offset. B) no increase in aggregate demand because there would be no direct expenditure offset. C) an increase in aggregate demand equivalent to the full impact of all of the coupons redeemable. D) no increase in aggregate demand due to the Ricardian equivalence theorem.
TANF stands for _____
a. Temporary Aid to Needy Families b. Temporary Assistance to Needy Families c. Transitory Aid to Needy Families d. Transitory Assistance to Needy Families
If all banks are subject to a uniform 25% reserve requirement and demand deposits are the only form of money, a $1,000 open market sale by the Fed would cause the money supply to
A. increase by $1,000. B. decrease by $1,000. C. decrease by $4,000. D. increase by $4,000.