!st 9 weeks test

Who is in charge of Monetary Policy

• The Government

• The Federal Reserve System

• The states

• The Department of the Treasury

During a recession, the Fed should use...

• Lower interest rates

• Raise interst rates

The federal government is attempting to encourage spending by consume rs and businesses, a fiscal policy BEST serving this purpose would be

• decreasing taxes
• decreasing government spending
• reducing the investment tax credit
• balancing the budget

What are two main monetary tools the government has?

• government spending and reserve requirement

• taxes and government spending

• buy/selling bonds and discount rate

• discount rate and taxes

What are the three economic goals of policy makers?

• Economic growth, low unemployment, and stable prices

• High inflation, high interest rates, and high taxes

• Government control, income inequality, and international trade

• Consumer spending, business investment, and government spending

What is Gross Domestic Product (GDP)?

• The value of all final goods and services produced within a country's border in a specific period of time

• The total amount of money in circulation within a country

• The total value of a country's exports minus imports

• The amount of money earned by the government through taxes

What is frictional unemployment?

(a)  

• Temporary unemployment or being between jobs
• Unemployment due to lack of demand for a specific type of labor

• Unemployment caused by a recession

• Unemployment caused by technological advancements

Which component of GDP accounts for the highest percentage in most economies?

(a)  

• Consumer spending
• Business spending (investment)

• Government spending

• Net exports

A used car counts toward GDP

(a)  

• True

• False

If one wanted to know whether there had been inflation or not, the BEST measure to observe would be the

• GDP
• Business cycle
• CPI
• National Dept