Econ Unit 3 Macroeconomics

Net exports is a measure of

• imports - exports

• exports - imports

• imports + exports

• exports + imports

Phase of the business cycle when it could be said that Real GDP is at its highest point, the economy is close to full employment, and the price level is increasing.

• peak

• recession

• trough

• recovery

The base year of this chart is?

• 1900

• 2000

• 2010

• none of the above

What happened to the CPI between 1900 and 2000?

• declined

• doubled

• tripled

• quadrupled

Why is the Federal Reserve known as the “banker’s bank”?

• the Fed sets interest rates at the banks for consumer lending

• the Fed contains the personal deposits of bank presidents around the county

• the Fed insures deposits at the bank for up to $250,000

• the Fed can use the discount rate to loan money directly to banks

Which of the following would most likely be implemented to encourage consumer spending for major purchases?

• a policy to restrict bank lending

• a policy to reduce interest rates

• a plan to increase state sales tax rates

• a plan for the Fed to sell bonds

Which of the following would most likely be a part of a nation’s fiscal policy aimed at slowing the growth of the United States economy?

• increasing government spending

• lower banking regulations

• higher income tax rates

• lowering sales tax rates

Which the following is one of the two goals of an expansionary fiscal policy?

• Increase unemployment

• Increase national debt

• Increase Real GDP

• Increase government regulation/control over the economy

If Government spending decreases, which of the following occurs?

• Real GDP increases and price level increases

• Real GDP decreases and price level increases

• Real GDP increases and price level decreases

• Real GDP decreases and price level decreases

Which of the following fiscal and monetary policy combinations would MOST LIKELY cause GDP to increase and unemployment to fall?

• Cut taxes Raise spending

• Cut taxes Sell bonds

• Cut taxes Decrease spending

• Cut Taxes Buy bonds