Please answer all the questions, thank you. Question 1 1 pts Which of the follow
ID: 1163783 • Letter: P
Question
Please answer all the questions, thank you.
Question 1 1 pts Which of the following is not a macro goal of the economy stable prices O steady growth O an increase in the stock market O low unemployment Question 2 1 pts Who determines the tax rate? O The Federal Reserve Bank O Congress O The President of the United States O All of the above Question 3 1 pts Which of the following would not be expansionary fiscal policy? O Decrease in the tax rate Decrease in the Required Reserve Ratio O Increase in transfers O Increase in Government SpendingExplanation / Answer
1.
Since inflation is the macro economic goals but stable prices are not a macro economic goals.
Hence option first is the correct answer.
2.
Congress determines the tax rates.
Hence option second is the correct answer.
3.
Since decrease in the required reserve ratio, is part of monetary policy.
Hence this is not a example of expansionary fiscal policy.
Hence option second is the correct answer.
4.
Since crowding out arises when government borrows from loanable fund market, so interest rate increases due to more demand for loan.
So with high interest rate, private investment decreases, so it is called crowding out.
Hence it can be said that crowding out arises when there is expansionary fiscal policy, that causes to an increase in the interest rate, that causes a decrease in the investment.
Hence option fourth is the correct answer.
Option fourth; expansionary , decrease.