Quiz_9-solutions econ 410

Quiz_9-solutions - Answer C During this recession there is NO substantial decrease in tax So C is correct Some student raised the question about D

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Q u i z 9 4/12/2011 1 Last Friday, democrats and republicans reached a budget deal to cut 38 billion dollars of spending to narrowly avoid a government shut down. The cut in spending is: A) Consistent with both long run and short run economic policies. B) Inconsistent with both long run and short run economic policies. C) Consistent with long run but inconsistent with short run economic policies. D) Consistent with short run but inconsistent with long run economic policies. Answer: C) 2 During the current recession, _____ did not happen. A) An immediate increase in money supply. B) An increase in government spending. C) A substantial decrease in tax. D) No increase in tariffs.
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Unformatted text preview: Answer: C) During this recession, there is NO substantial decrease in tax. So C) is correct. Some student raised the question about D). Since no increase in tariffs DID happen (we did not raise the tariffs) this time – so D) is NOT correct. 3 During the Great Depression (the whole decade), ____ did happen. A) An immediate increase in money supply. B) An increase in government spending. C) A decrease in tax. D) No increase in tariffs. Answer: B) – Franklin D. Roosevelt’s New Deal raised government spending. However, during the Great Depression, nominal money supply was reduced, both tax rates and tariff rates have increased....
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This note was uploaded on 02/13/2012 for the course ECON 410 taught by Professor Hernandez-verme during the Spring '08 term at Texas A&M.

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