unit 5 macro retake

Which of the following policy choices represents a combination of fiscal and monetary policies designed to bring the economy out of a recession?

Increasing government spending and decreasing the policy rate

Which of the following monetary and fiscal policy mixes will reduce unemployment?

Decreasing interest on reserves and decreasing taxes

Which of the following will happen if a country's government reduces business taxes?

The short-run aggregate supply curve will shift to the right.

Economic growth is shown by a rightward shift in

the production possibilities curve

Which conclusion can be supported by the data in the table above?

Country Y's real GDP per capita is greater than Country X's real GDP per capita.

If real output is $9,000, and the price level is 2, and the velocity of money is 3, then the money supply is

$6,000

Which of the following is a cause of hyperinflation?

Rapid growth of the money supply

Assume a country's banking system has ample reserves. Which of the following combinations of fiscal and monetary policy will reduce the price level?

Decreasing government spending and increasing administered interest rates

Country A's growth rate in per capita real gross domestic product (GDP) has been consistently higher than that of Country B. Which of the following factors can account for these differences in the per capita GDP growth rates?

The labor force of Country A is

becoming more skilled than the labor force of Country B.

An increase in government spending financed by borrowing will result in which of the following?

The rate of physical capital accumulation will decrease in the long run.

If the government decreases spending while the country's central bank decreases its administered interest rates, which of the following will definitely occur?

Interest rates will fall.

Which of the following is true about the Phillips curve?

A change in aggregate demand does not shift the long-run Phillips curve (LRPC).

Which of the following is true about a country's national debt?

It increases when the country's government has a budget deficit.

If the government implements an expansionary fiscal policy, what action can the central bank take to maintain a stable interest rate, assuming the banking system has limited reserves?

Buy government bonds

If the total of government spending plus government transfer payments is less than tax revenues, which of the following must be true?

The government budget is in surplus.