Question

Multiple questions:

If Government spending decreases by $100, GDP will

   a) increase by $500   b) fall by $500   c) fall by $400

   d) increase by $900   e) fall by $900

If taxes increase by $100, GDP will

   a) increase by $400   b) decrease by $400   c) rise by $500

   d) fall by $600       e) not change

Suppose that Congress reduced Government spending at the same time that the price of

imported oil increased. This would have the following impact

a). increase both the price level and real GDP

b). reduce both the price level and real GDP

c). increase the price level, but the impact on real GDP is uncertain

d). decrease real GDP, but the impact on the price level is uncertain

Social security, welfare payments, aid for housing are all components of

a) business investment

b) consumption spending

c) disposable income

d) transfer payments

e) exports

Which of the following is not part of a tight monetary policy

a) selling of government securities by the Federal Reserve

b) increasing government spending

c) increasing the discount rate

d) increasing the required reserve ratio

. A decrease in consumers' money income will shift the:

a) demand curve for X to the right

b) demand curve for X to the left

c) supply curve for X to the right

d). supply curve for X to the left

Lower interest rates will

a) lower government spending

b) increase transfer payments

c) decrease car and housing sales

d) increase business investmen

If the demand for cattle is increasing more rapidly than supply

a) cattle prices will rise

b) cattle prices will fall

c) cattle prices will not change

d) any of the above is possible

Given a reserve requirement ratio of 10 percent, what will be the impact on the money   supply if the Fed buys $10 in securities from the banks

a) increase by $100       b) decrease by $100

c) increase by $50       d) decrease by $20

e) decrease by $30

Answer 1

Suppose that Congress reduced Government spending at the same time that the price of

imported oil increased. This would have the following impact

d). decrease real GDP, but the impact on the price level is uncertain
Exp: both demand and supply curves shift in

Social security, welfare payments, aid for housing are all components of

d) transfer payments

Which of the following is not part of a tight monetary policy

b) increasing government spending
Exp: Change in government spending is part of fiscal policy.

. A decrease in consumers' money income will shift the:

b) demand curve for X to the left

Exp: There will be fall in demand.