ISS Week 11-Macroeconomics

According to the U.S. Department of Commerce (2018), which receives the highest percent of local outlay?

• Medicare.

• Social Security.

• Health.

• Education and public welfare.

Macroeconomic policies of government concern:

• individuals.

• only large states.

• only general welfare as a whole.

• only some parts of the larger economy.

The effects of a firm’s actions or decisions that negatively affect others but that the firm does not consider when undertaking the action are called:

• externalities.

• manifest consequences.

• the cost of doing business.

• ancillaries.

The Keynesian Revolution introduced the concept that government:

• should not intervene in the economy.

• must resist the desire to stabilize the economy.

• should not be concerned with unemployment figures.

• can and should play a stabilizing role in the economy.

The Fed can help the economy by controlling:

• bailout legislation.

• interest rates.

• exchange rates.

• the president’s economic agenda.

Monetary policy does NOT affect:

• the level of income directly

• interest rates.

• credit availability.

• inflation.

The fiscal policy rule of thumb allows that some government budget deficits can be useful in stimulating the economy out of a:

• slump.

• recession.

• depression.

• boom.

Regulations that impose significant costs but do not provide the funds to pay these costs are called:

• economic inducements.

• unfunded mandates.

• economic stimulators.

• hidden benefits.

Because of government’s large indirect role, we call our economic system a pragmatic market economy rather than a(n):

• hybrid economy.

• unplanned economy.

• free market economy.

• planned economy.

Contractionary monetary policy makes credit harder to get, raises interest rates, and has a downward effect on the level of income.

• True

• False