Evaluate the following statements. Which of the following is/are true? (i) Advocates of active policy believe that the central bank should adjust its policy rate whenever the economy is cooling down or heating up. (ii) Advocates of passive policy believe that the government should increase government spending when aggregate demand contracts. (iii) Advocates of passive policy believe that policymakers should "lean against the wind" in response to fluctuations in output. O a. Only (iii) O b. Only (1) O c. O d. Only (ii) and (iii) Only (i) and (iii)

Evaluate the following statements. Which of the following is/are true? (i) Advocates of active policy believe that the central bank should adjust its policy rate whenever the economy is cooling down or heating up. (ii) Advocates of passive policy believe that the government should increase government spending when aggregate demand contracts. (iii) Advocates of passive policy believe that policymakers should "lean against the wind" in response to fluctuations in output. O a. Only (iii) O b. Only (1) O c. O d. Only (ii) and (iii) Only (i) and (iii)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The situation in which policymakers have the incentive to announce one economic policy but then change that policy after citizens have acted on the initial state policy is known as O presidential politics. O liar's syndrome. O foregone credibility. O time inconsistency. finesse reporting.
Which of the following are positive feedback mechanisms? Select all correct answers. O In a boom, asset prices rise, borrowers have more collateral, banks become more willing to lend to them, and spending increases further. O The boycotting of an oil-producing country causes a shortage of oil and a rise in oil prices. The quantity demanded falls as consumers switch to other fuels, causing the price to stabilise. O A fall in the price level (deflation) causes consumers to expect further falls. This causes them to postpone spending and the reduction in demand causes prices to fall further. O Serious road congestion causes travellers to switch to trains and subway, limiting the further increase in congestion.
1) Which of the following is false? O A) The COVID-19 pandemic ended the longest economic expansion in US history. O B) 1928 the Federal Reserve raised the discount rate from 3.5% to 5%. O C) The Great Depression took over ten years to recover. D) 2004 - 2006 The Fed dropped the Federal Funds Rate to 0.5%. E) The Emergency Banking Act took the US off the gold standard.
Assume the following macroeconomic conditions in the United States and that US policy makers desire to achieve their three macro-policy goals defined in the usual way. A. Output has risen above potential output, creating a large positive output gap. B. The employment rate has risen, creating an unemployment rate of 3%. C. The inflation rate has risen to 8% per year. Which statement is CORRECT? O Output is too high; the unemployment rate is too low; and the inflation rate is too high. Output is too high; the employment rate is too low; and the inflation rate is too low. Output is too high; the employment rate is too low; and the inflation rate is too high. Output is too low; the unemployment rate is too low; and the inflation rate is too high. Output is too high; the unemployment rate is too low; and inflation rate is too low.
As a response to the 2020 virus-induced economic disruption, the Federal Reserve, lowered the Reserve Requirement for commercial banks and it resulted in Money supply increasing a. Money supply decreasing Ob. Inflation rate increasing Oc. Commercial Bank lending decreasing d.
QUESTION 36 What determines tax revenues? O a. The level of national income. O b. The income tax rate. O c. The money supply in the economy. O d. Both (a) and (b).
QUESTION 28 What is explained by accelerator theory? O a. The way in which a small injection leads to a greater increase in GDP O b. The way in which unemployment today depresses aggregate demand in future, creating more unemployment O c. The way in which current inflation leads to greater future price rises O d. The way a small change in national income leads to a greater increase in investment
Each of the following is a determinant of demand except O a. lastes. O b. expectations. Oc production technology. O d. the prices of related goods. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Which of the following statements about institutions is incorrect? O a. The implied covenant of good faith and fair dealing in contract law is part of an institution. O D. The authority on family issues that a society confers to the elders is not considered part of the society's institutions. O C. Institutions are the humanly devised constraints that shape economic, political, and social interaction. O d. Laws and regulations that specify what constitutes market manipulation in the financial market are part of a country's economic institutions. O e. The extent to which people in a society are willing to entertain ideas and debates that contradict their own existing beliefs is considered social norms and informal institutions.
The proponents of the hysteresis hypothesis argue that: (i) the short-run and the long-run developments of the economy can be studied separately. (ii) the fluctuations in aggregate demand affect output and employment only in the short run. (iii) negative shocks to aggregate demand can reduce the natural level of output and employment. O a. Only (i) and (iii) b. Only (iii) O c. Only (i) and (ii) O d. Only (ii)