Monetary and Fiscal Policy

If Congress increases government spending by the same amount it increases taxes aggregate demand will

• remain the same
• decrease, these are both contractionary
• increase
• shift down

Which of the following results should be included where the question mark appears in the illustration?

• unemployment
• inflation
• consumer spending
• production

Which of the following results should be included where the question mark appears in the illustration?

• the reserve requirement
• interest rate
• inflation
• unemployment

Money loses its value when it

• It becomes too plentiful
• becomes too portabale
• is divisible
• is durable

What dollar amount should appear in place of the letter P in the table?

• $1,000,000
• $100,000
• $1,900,000
• $1,900

What dollar amount should appear in place of the letter S in the table?

• $200,000
• $1,800,000
• $2,200,000
• $1,800

What amount should replace the X in the table?

• $1,000
• $100,000
• $1,000,000
• $10,000

What percentage should replace the Y in the table?

• 20%
• 5%
• 10%
  15%
• 2%

Which items on the graph are part of M1?

• currency and savings deposits
• currency, traveler’s checks plus demand deposits, and other checkable deposits
• other checkable deposits, money market mutual funds, and small time deposits
• currency, savings deposits, and small time deposits

In order for money to have value, it must have all of the following characteristics EXCEPT

• portability.
• durability.
• divisibility.
• plentiful availability.