ECO3041 - Ch 16 & 17 Review Qs

ECO3041 Ch 16 - Chapter 16 and 17 Review Questions Questions 1 Stabilizing a nations price level and the purchasing power of its money can be

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Chapter 16 and 17 Review Questions Questions: 1. Stabilizing a nation’s price level and the purchasing power of its money can be achieved: A) only with fiscal policy. B) only with monetary policy. C) with both fiscal and monetary policy. D) with neither fiscal nor monetary policy. 2. Other things equal, an excessive increase in the money supply will : A) increase the purchasing power of each dollar. B) decrease the purchasing power of each dollar. C) have no impact on the purchasing power of the dollar. D) reduce the price level. 3. Which of the following is a tenet of supply-side economics? A) High marginal tax rates severely discourage work, saving, and investment. B) Increases in social security taxes and other business taxes shift the aggregate supply curve to the right. C) The Federal Reserve should adhere to a monetary rule that limits increases in the money supply to a 5 percent annual rate. D) Transfer payments increase incentives to work. Gamma production possibilities: A B C D E T e a 1 2 0 9 0 6 0 3 0 0 P o t s 0 3 0 6 0 9 0 1 2 0 Sigma production possibilities: A B C D E T e a 4 0 3 0 2 0 1 0 0 P o t s 0 3 0 6 0 9 0 1 2 0 4. On the basis of the above information: A) Gamma should export both tea and pots to Sigma. B) Sigma should export tea to Gamma and Gamma should export pots to Sigma.
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This note was uploaded on 01/22/2012 for the course ECO 3041 taught by Professor Dacal during the Fall '11 term at FIU.

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ECO3041 Ch 16 - Chapter 16 and 17 Review Questions Questions 1 Stabilizing a nations price level and the purchasing power of its money can be

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