If the government currently has a balanced budget, which one of these actions wi
ID: 1109833 • Letter: I
Question
If the government currently has a balanced budget, which one of these actions will lead to a surplus in the government's budget?
Select one:
a. The Fed raising key interest rates
b. Increasing spending on education
c. Lowering income tax
d. Raising corporate taxes
e. Raising welfare payments
The Obama administration spent billions of dollars bailing out firms and expanding the U.S.'s infrastructure in order to help the economy recover from the 2008-09 recession. Its actions BEST supports the view of:
Select one:
a. Supply-side economists
b. Keynesian economists
c. Classical economists
d. Constructional economists
e. Monetarists
Which one of these actions will lower the amount of money in M2 AND lower the amount in M1?
Select one:
a. Maggie uses funds from her checking account to purchase a mutual fund
b. Mandy uses money from a savings account to purchase a car
c. Marissa uses money from her savings account to purchase travelers checks
d. Marsha transfers money from her checking account to a time deposit
e. Melinda sells holdings of corporate stocks and places the money in a time deposit
Which of the following statements is true about automatic stabilizers?
Select one:
a. They are a part of the government discretionary policy
b. They tend to stimulate the economy during expansions
c. They are counter-cyclical
d. They tend to slow down the economy during recessions
e. They shift the economy away from potential GDP
Explanation / Answer
1 (d) increasing corporate tax would increase the revenue of government and surplus in budget .
2 (b) Keynes was the great supporter of the government intervene at the time of depression.
3 (a) investment in mutual fund does not comes in the definition of M1 and M.
4 (B) Automatic stabilizer stimulate the economy and stabilize it.