Economics homework question?

Posted on 2014-12-11 06:33:00 in Economics by DAVIN

1. "Crowding Out" is the offsetting effect on private expenditures caused by the government's purchase of bonds to increase the money supply.

A. True
B. False

2. In the AS/AD Model, contractionary monetary policy would most likely cause the AD Curve to:

A. shift to the left.
B. shift to the right.
C. not shift at all.
D. completely impossible to tell.

3. What is true about expectations of inflation along the short-run Phillips Curve?

A. They are rising as unemployment falls.
B. They are falling as unemployment falls.
C. They remain constant regardless of unemployment.
D. They are rising or falling depending on how the economy is performing.

4. An increase in the federal funds rate is an indication that monetary policy is contractionary.

A. True
B. False

5. Classical economists interpret a large increase in the money supply as an indication of expansionary monetary policy, ultimately causing inflationary pressures to build in the economy.

A. True
B. False

6. Increasing national defense spending is an example of:

A. expansionary monetary policy.
B. contractionary monetary policy.
C. expansionary fiscal policy.
D. contractionary fiscal policy.

7. In Keynesian terms, contractionary monetary policy is called for when savings is less than investment, and the economy is operating above potential output/income.

A. True
B. False

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