If the supply of money decreases, what happens in the money market? This aspect of economics deals with principles of economics that apply to an economy as a whole, particularly the general price level, output and income, and interrelations among sectors of the economy. Macroeconomics Chapter 11 Test Questions question"Fiscal Policy" is the federal government's plan for answerb. These are the Fiscal Policy Practice Exam Questions for A-Level Economics. In … 8. The government should decrease the money supply. appear. spending and taxes, designed to influence the level of aggregate demand. question. Section I (answer at least one of these questions): 1. They improve productivity in the labor market. back 3 However, there are those who worry about fiscal dominance and/or budgetary independence of the central bank. We'll review your answers and create a Test Prep Plan for you based Which of the following is least likely an instrument of monetary policy? Once you have answered the questions, click on … B. equilibrium income will fall, the rate of interest will fall. Flashcards. Decrease the discount rate. decrease in output and increase in interest rates, increase in output and decrease in interest rates, decrease in output and decrease in interest rates, no change in output and decrease in interest rates, increase in output and increase in interest rates. Sciences, Culinary Arts and Personal They help offset declines in aggregate demand during recessions. Match. The AP Macroeconomics exam consists of two sections: a multiple-choice section and a free response section. It decreases interest rates, which attracts foreign investment into US assets. Good luck! PLAY. All of the following are examples of fiscal policy to lower unemployment, EXCEPT: _____ fiscal policy addresses a _____ economy, while _____ fiscal policy addresses an _____ economy. If the economy is suffering from extremely high rates of inflation, how should the government intervene from the standpoint of a classical economist? EmilyLynnCarver. Learn. Click it to see your results. Premium members get access to this practice exam along with our entire library of lessons taught by subject matter experts. They result in deficits in the long term and surpluses in the short term. Prelim … Studyclix makes exam revision and study easier ... Fiscal Policy read more. Multiple choice questions Web links Review questions Sample exam questions Web appendices Lecturer resources VLE Test bank PowerPoint slides Lecture plans Excel based exercises for macroeconomic modelling Browse: AP Macroeconomics AS/AD and Fiscal Policy Test Multiple Choice Identify the choice that best completes the statement or answers the question. Write the answers on the separate sheet provided. (a) How independent is the Fed? Is monetary policy controlled by the government? How should fiscal policy be used in an inflationary economy? Purchase government bonds in the open market. ____ 1. on your results. There are 2 types of fiscal policy: Contractionary fiscal policy: Where the government reduce spending and / or when they make taxes higher, they try to increase its PSBR( public sector borrowing requirement) to fund the tax drops they also do this to reduce its surplus on its budget for the fiscal year. MONETARY AND FISCAL POLICY FINAL EXAM 29 th January 2014 13.00 -16. However, the issue of whether monetary policy should target the inflation rate or the price level remains a live one. $30 B. If this budget is not revised, what STANDARD OF THE PAPER The questions as usual assumed the normal trend depicting the spread in the syllabus and the weighting in line with the syllabus grid. A. equilibrium income will rise, the rate of interest will fall. Final Exam. In addition to working these problems, ... Fiscal policy is very effective: … Decisions about taxation and spending. If you're seeing this message, it means we're having trouble loading external resources on our website. An expansionary fiscal policy would most likely cause which of the following changes in output and interest rates? Velocity of money 4. When you have completed the practice exam, a green submit button will Increase spending. Fiscal policy choices: Expansionary fiscal policy is used to combat a recession (see examples illustrated in Figure 12-1). What is monetary policy? Smaller overall progressivity in the tax code. If GDP is raising and the unemployment rate is decreasing, what actions would Monetary Policy and Fiscal Policy take to try to fix this economic situation? A planned increase in the budget deficit. The multiple-choice exam is an open book, open note exam which will be taken on-line outside of class time. Get free past questions, answers, marking scheme, projects and reseach materials, test, course materials from your favourite hosted institutions Economics 470/570 Winter 2005 Final Exam Part I - Definitions. quiz which has been attempted 593 times by avid quiz takers. This exam has 20 multiple choice questions, 4 short answer questions and 2 essay questions Part 1: Multiple Choice Questions One point per question. Which of the following will a Keynesian economist most likely favor if the economy is operating at point a? Gravity. Subjects Courses Job board Shop Company Support Main menu. Expansionary Policy needed: In Figure 12-1, a decline in investment has decreased AD from AD 1 to AD 2 so real GDP has fallen and also employment declined.Possible fiscal policy … Please write your answers in the space below each question. According to Keynesian economists, if policymakers thought the economy was headed into a recession, what action would be most appropriate? John Maynard Keynes believed that fiscal policy designed to deal with budgets should _____. Inspection of the ten-page course bibliography and the final examination questions along with two note-cards filed with these course materials, it appears that well over half the course was in all likelihood dedicated to fiscal policy topics with monetary policy for stabilization topics accouting for perhaps one-third of the course. Assume the economy is in a recession and the Federal Reserve takes the appropriate monetary policy actions. Choose your answers to the questions and click 'Next' to see the next set of questions. Choose your answers to the questions and click 'Next' to see the next set of questions.