Macroeconomics & Money #1

Government policy that attempts to manage the economy by controlling taxing and spending is called ___________________.

• Macroeconomics equilibrium

• Fiscal policy

• Aggregate demand

• Deregulation

Funds raised through taxing citizens to pay for government purchases/spending are called ____________________.

• Government spending

• Wage-price controls

• Aggregate supply

• Government taxation

Goods and services provided by the government and paid for by taxation are called ___________________.

• Government spending

• Wage-price controls

• Aggregate supply

• Government taxation

One of the most prominent objectives of macroeconomic

policy in recent years has been the need to control inflation.

• Price stability

• Full employment

• Income redistribution

• Economic growth

For an economy to be operating on the production possibility curve, the factors of production need to be fully employed.

• Price stability

• Full employment

• Economic growth

• The balance of payment

The ultimate aim of a society is to improve the well-being of its citizens, then in economic terms this means that the resources available within the economy need to expand through time in order to widen people’s choices. What macroeconomic policy is being described?

• Economic growth

• Environmental awareness

• Price stability

• The balance of payments

6. Expansionary policy is used to boost economic activity. Which of these propositions is not an expansionary policy tool?

• Decreasing interest rates

• Increasing interest rates

• Increasing government spendings

7. Expansionary policy will often be used, except

• During recession

• During rising inflation

• During an economic downturn

10. Contractionary policy is used to slow economic activity. Which of these propositions is not a contractionary policy?

• Decreasing interest rates

• Increasing interest rates

• Decreasing government spendings

11. Contractionary policy will often be used:

• During recession

• During rising inflation

• During an economic downturn

• During an overheating economy