Which of the following represents a combination of contractionary fiscal and expansionary monetary policy?

Which of the following is true when expansionary fiscal and expansionary monetary (easy money) policy are used at the same time?

A

Unemployment will increase.

B

Real GDP will decrease.

C

Interest rates will remain relatively constant.

D

Inflation will decrease dramatically.

Which of the following monetary policies would lessen the effectiveness of expansionary fiscal policy?

A

Decreasing the value of the domestic currency.

B

Lowering the income tax rate.

C

Selling Treasury securities to commercial banks.

D

Lowering the discount rate.

Appropriate fiscal and monetary polices during the contractionary phase of the business cycle include

A

budget surpluses and higher discount rates.

B

tax reductions and open market purchases.

C

budget surpluses and lower discount rates.

D

increases in government spending and higher discount rates.

Contractionary monetary policy implies which of the following about the discount rate, the nominal interest rate, and aggregate demand?

A

Decreases Increases Decreases

B

Increases Increases Decreases

C

Decreases Decreases Decreases

D

Increases Increases Increases

A contractionary monetary policy will cause the nominal interest rate, aggregate demand, output, and the price level to change in which of the following ways?

A

Decrease Increase Increase Increase

B

Decrease Decrease Decrease Increase

C

Increase Decrease Decrease Increase

D

Increase Decrease Decrease Decrease

Which of the following is an example of contractionary monetary policy?

A

The Fed lowers the reserve ratio.

B

The Fed lowers the discount rate.

C

The Fed increases taxes on household income.

D

The Fed decreases spending on welfare programs.

E

The Fed sells Treasury securities to commercial banks.

Which of the following would be considered contractionary monetary policy?

A

The purchase of bonds

B

The sale of bonds

C

An increase in taxes

D

An increase in government spending

In the short run, contractionary monetary policy causes aggregate demand to output to , and the price level to

A

Increases Increases Increases

B

Increases Increases Decreases

C

Decreases Decreases Increases

D

Decreases Decreases Decreases

Directions: A string of words is fed into a computing machine. It processes the input and gives an output in the following manner: Input: Honesty is the best policy. Step 1: is Honesty the best policy Step 2: is the Honesty best policy Step 3: is the best Honesty policy Step 4: is the best policy Honesty Output: is the best policy Honesty Now, If the input is "A rolling stone gathers no moss", what will be the fifth word in the string after 4 steps?

A

Moss

B

No

C

Stone

D

A

In the following passage, some of the words have been left out. Read the passage carefully and select the correct answer for the given blank out of the fouralternatives. We now have a peculiar combination _______________ the economic policy of India: a declared attempt at fiscal consolidation, combined with a _________________ to do what it takes to raise tax revenues. This unfortunate ________________ has meant a squeeze _____________ Central government expenditures, and particularlythose relating to social spending that directly ____________ most people in the country. We now have a peculiar combination _______________ the economic policy of India

A

into

B

in

C

of

D

about

Which of the following represents a combination of contractionary fiscal and expansionary monetary policy?

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