MacroEconomics

What is the main function of Fiscal policy?

• Government spending and taxation to stabilize the economy

• Buy houses

• Take over the economy

• Buy government bonds

If the economy is in an inflationary period, what action would fiscal policy most likely take?

• Decrease Taxes

• increase government spending

• Increase taxes

• Decrease the discount rate

What is the function of the expansionary phase?

• Decreasing unemployment rate

• increasing inflation rate

• Decreasing GDP

• Both A and B

Who controls the Monetary policy?

• FED Bank

• Fed government

Easy Money policy Buys government bonds

• True

• False

Expansionary policy increase government spending and decrease taxes

• false

• True

Contractionary policy does what?

• Increase government spending

• Decrease government spending

• Decrease reserves

• Decrease Taxes

If the economy is in a recession, the FED could do all of the following EXCEPT

• lower discount rate

• buy securities

• lower taxes

• Lower the federal funds rate

Peak is the phrase you stay at

• True

• False

What is the GDP Formula?

• C+I+G+NX

• C+G+NX+I