Question # 1

An example of discretionary fiscal policy would be.

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The operation of the welfare sate

The operation of the processive federal income tax

A tax cut adopted to stimulate consumption

An interest rate out in plummeted to stimulate consumption

An increase in the money supply other thighs equal shifts the ______ curve to the

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IS ; right

Is ; left

LM ; Left

LM ; right

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.

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up ; left

up ; right

down ; left

down ; right

A 15% VAT is a.

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Proportional income tax

Fixed excise duty

Ad valorem indirect tax

None of the above

Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.

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Money demand rises proportionately to the rise in wealth.

Money demand rises, but less than proportionately to the rise in wealth.

The overall effect in ambiguous

Money demand declines

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

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IS ; right

IS ; Left

LM ; Left

LM ; right

A good that is used as a medium of exchange as well as being a consumption good is called.

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A barter money

A commodity money

A legal tender

A debased money

An item designed as money that is intrinsically worthless could the.

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A currency note

A silver coin

A barter item

Any tradeable commodity

Per Capita income is obtained by dividing National income by

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Total labor Force in the country

Unemployed Youth in the country

Total population of that country

None

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

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Revenue from value added tax

Level of company profits

Level of unemployment

Average level of wages

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

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IS ; Leftward

IS ; rightwards

LM ; Leftward

LM ; rightward

The government performs its redistribution function mainly through.

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Trade practice legislation against anticipative behavior

The provision of public goods

Taxes and transfer payments

Tariffs on imports

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

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Low ; smaller ; high

Low ; larger ; high

low ; smaller ; middle

High ; larger ; low

A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.

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Reduce

Increase

Have no effect on

Double

The IMF is an agency charged with providing.

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Technical assistance to stock market and financial market problems.

Loans for post World War II reconstruction

Short term credit for international balance of payments deficits

Bonds denominated in U.S. dollars as a loan to LDCs

An autonomous increase in the value of the domestic exchange rate.

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Increases output net exports and the interest rate.

Decreases output net exports and the interest rate

Decreases output and net exports and increases the interest rate.

Increase output and decreases net exports and the interest rate.

When a government prints money to finance its expenditures it is likely to cause

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Unemployment

Inflation

Deflation

Reductions in the use of barter

The main role of the Federal Reserve is to

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Administer the government on the state of the economy

Overses the operations of the financial system and monetary management.

Establish the value of the dollar and official interest rates

Provide advice to the government on the state of the economy.

"Transactions" money is money used as a

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Store of value

Unit of account

Medium of exchange

Standard of deferred payment

Fiscal policy is purposeful movements in _____designed to direct an economy

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Interest rate

Legal structures

Government regulations

D Government spending and taxes

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

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decreases ; right

decreases ; fall

increases ; rise

increases ; fall

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