The ultimate role of the financial system of a country is to:
A. provide a place for wealthy households to save.
B. facilitate production, employment, and consumption.
C. be a low-cost source of funds for government.
D. provide jobs in the financial sector.
Answer: B
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The filing status of an unmarried single parent living with another person is likely to be
A. married filing jointly. B. single head of household. C. single. D. married filing separately.
When the government transfers resources to the poor in the form of a good or service, it is called:
A. an in-kind transfer. B. the Earned Income Tax Credit (EITC). C. Temporary Assistance to Needy Families (TANF). D. a regressive tax.
When potential GDP increases, the potential GDP line ________, and the aggregate supply curve ________
A) shifts rightward; shifts rightward B) shifts rightward; shifts leftward C) shifts leftward; shifts rightward D) shifts leftward; shifts leftward E) shifts rightward; does not shift
If Congress authorized the President to lower tax rates or to initiate spending projects when aggregate demand was inadequate, which consequence could be predicted most confidently?
A) Aggregate spending would be more stable over time. B) Recessions would be less severe. C) Recessions would occur less frequently. D) The political power of the President would increase. E) We would experience a lower rate of inflation.