Mod 20 Quiz

Fiscal policy refers to:

• the manipulation of interest rates.

• the manipulation of government spending and taxations.

• the manipulation of the quantity of money.

• the manipulation of interest rates and of government spending.

• the manipulation of imports and exports.

Economic theory in 1936 changed dramatically with the publication of:

• The General Theory of Employment, Interest and Money by John Maynard Keynes.

• The Wealth of Nations by Adam Smith.

• The Road to Serfdom by F.A. Hayek.

• Principles of Economics by Paul Samuelson.

• A Theory of the Consumption Function by Milton Friedman.

Which of the following is a government transfer?

• wages paid to U.S. senators

• purchases of tanks for the army

• Social Security payments to retired postal workers

• payments to contractors for repairs on interstate highways

• interest payments to those who have purchased U.S. Treasury bills.

Fiscal policy that decreases aggregate demand is:

• balanced.

• supplemental.

• contractionary.

• expansionary.

• an open market operation.

Discretionary fiscal policy refers to:

• any changes in interest rates.

• any change in money supply.

• changes in government spending or taxes to close a recessionary or inflationary gap.

• changes in taxes to account for externalities and control pollution.

• manipulation of foreign exchange rates.