SOLUTIONS

SOLUTIONS - of increasing it (use the equation, Y = C + I +...

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ECO2013 (Calhoun) Solutions 1. d. 2. b. 3. d. 4. e. 5. b. 6. a. 7. c. Keynesian’s believed in government intervention. Thus, to get the economy out of a recession, the government should spend more and tax less. 8. d. Keynesian’s believed in government intervention. Thus, to slow down a boom, the government should spend less and tax more. 9. b. 10. d. The crowding-out effect refers to budget deficits being ineffective in stimulating an economy in a recession. 11. a. The crowding-out effect refers to budget deficits being ineffective in stimulating an economy in a recession. A decrease in net exports would decrease aggregate demand instead
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Unformatted text preview: of increasing it (use the equation, Y = C + I + G + X) 12. d. 13. a. 14. c. Supply-side economists argue that workers will work more if tax rates decrease since workers will be able to keep more of their paycheck. 15. b. 16. e. 17. a. banks primarily earn money by lending out excess reserves to businesses and customers. (Regular)Reserves are left at the Fed or held in the vault. 18. c. banks increase the money supply by extending loans due to the money multiplier and fractional reserve requirement Macroeconomics (Calhoun) Test 3 Review Packet Fall 2010 2 19. a. 20. e....
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This document was uploaded on 11/01/2011 for the course ECO ECO2013 at FSU.

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SOLUTIONS - of increasing it (use the equation, Y = C + I +...

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