8. (2010-5) Which of the following is an example of fiscal policy? (A) Increasing government expenditures to build highways (B) Increasing the money supply to increase income (C) Decreasing the discount rate to lower unemployment and inflation (D) Decreasing the federal funds rate to stimulate investment (E) Decreasing the reserve ratio to increase bank reserves 9. (2010-41) If the economy was in a severe recession, the most expansionary fiscal policy would be to (A) decrease both personal income taxes and government spending by equal amounts (B) decrease both the reserve requirement and government spending by the same proportion (C) decrease personal income taxes and increase government spending by equal amounts (D) increase the money supply and increase government spending by the same proportion (E) increase social security taxes and increase government spending by equal amounts

8. (2010-5) Which of the following is an example of fiscal policy? (A) Increasing government expenditures to build highways (B) Increasing the money supply to increase income (C) Decreasing the discount rate to lower unemployment and inflation (D) Decreasing the federal funds rate to stimulate investment (E) Decreasing the reserve ratio to increase bank reserves 9. (2010-41) If the economy was in a severe recession, the most expansionary fiscal policy would be to (A) decrease both personal income taxes and government spending by equal amounts (B) decrease both the reserve requirement and government spending by the same proportion (C) decrease personal income taxes and increase government spending by equal amounts (D) increase the money supply and increase government spending by the same proportion (E) increase social security taxes and increase government spending by equal amounts

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

the right answer is A and C and i wonder why. pls explain by details, thx!

8. (2010-5)
Which of the following is an example of fiscal
policy?
(A) Increasing government expenditures to build
highways
(B) Increasing the money supply to increase
income
(C) Decreasing the discount rate to lower
unemployment and inflation
(D) Decreasing the federal funds rate to stimulate
investment
(E) Decreasing the reserve ratio to increase bank
reserves
9. (2010-41)
If the economy was in a severe recession, the
most expansionary fiscal policy would be to
(A) decrease both personal income taxes and
government spending by equal amounts
(B) decrease both the reserve requirement and
government spending by the same
proportion
(C) decrease personal income taxes and increase
government spending by equal amounts
(D) increase the money supply and increase
government spending by the same
proportion
(E) increase social security taxes and increase
government spending by equal amounts

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