Question

1) An increase in the money supply decreases the interest rate in the short run. A)...

1) An increase in the money supply decreases the interest rate in the short run.
A) True
B) False
2) Under Fiscal Policy, Congress may decide to either cut taxes or increase spending if they want to stimulate economic growth.
A) True
B) False
3) Fiscal and Monetary efforts aimed at slowing economic growth reflect an Expansionary Policy.
A) True
B) False


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Homework Answers

Answer #1

A) True

If money supply increases supply curve shifts rightwards causing interest rate to decline.

2) True

Under Fiscal policy , government can either change taxes or government spending

If government reduces taxes it leaves poeple with more to consume or increasing government can increase the income of people . In both cases Aggregate Demand Increases which stimulate economic growth.

3) False

Slowing economic growth policy are called contractionary.

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