When a recession hits, we would expect the government to run a budget deficit by raising the level of its spending or by cutting taxes, or perhaps both. The Fed would be expected to:
A. reduce the required reserve ratio, increase the discount rate, and buy securities on the open market.
B. reduce the required reserve ratio, reduce the discount rate, and sell securities on the open market.
C. reduce the required reserve ratio, reduce the discount rate, and buy securities on the open market.
D. increase the required reserve ratio, reduce the discount rate, and sell securities on the open market.
Answer: C
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Which of the following statements is true?
A) Monetarists believe that the government should be very involved in managing and directing the economy. B) Monetarists believe that the economy is self-regulating. C) There is very little difference between monetarist and Keynesian thought. D) Monetarists hold that velocity is constant. E) a and c
The term "fiscal policy" refers to
A. the use of tax changes to make the distribution of personal income more equitable. B. changes in the levels of government spending and taxation for the purpose of stabilizing the economy. C. changes in the level of government spending. D. the use of taxes and transfer payments to make the distribution of after-tax income more equitable.
Which of the following is a noncash transfer?
A. A payment to a divorced mother under TANF. B. SNAP (food stamps). C. A social security payment to a retiree. D. Unemployment compensation benefits.
Because in oligopoly the actions of one firm have a perceptible effect on the other firms, oligopoly firms act strategically.
Answer the following statement true (T) or false (F)