39. The Fed reduced the fed-funds rate to nearly zero percent and then did what to help jumpstart the economy following the Great Recession of 2008f2009? a. bought multiple rounds of long term US treasury bonds b. bought multiple rounds of US agency debt and mortgage backed securities 0. provided forward guidance on its goal of keeping interest rates low for an extended time d. all of the above 40. One of the problems of increasing the money supply dramatically to lower interest rates, is that the Fed runs the risk that it overshoots and causes a. ination to increase rapidly b. ination to decrease rapidly c. unemployment to increase d. tax revenues to fall 41. DiscretionaryfActive Fiscal Policy is a. optional and implemented by Congress and the President b. optional and implemented by the Federal Reserve 0, mandatory and implemented by Congress and the President (1. mandatory and implemented by the Federal Reserve 42. An example of Automatic Fiscal Policy is a. unemployment benefits that kick in when someone loses their job b. food stamp benets for folks whose income is below a certain threshold c. progressive tax rates that increase as incomes rise d. all of the above 43. The marginal propensity to consume is the amount that a person a. consumes 'om each incremental dollar of income b. saves from each incremental dollar of income c. consumes on average from their total income d. saves on average from their total income 44. Which is a more effective expansionary scal policy approach (i.e., which gives more \"bang for the buck\")? a. raising taxes by 100 billion b. raising government spending by 100 billion c. lowering taxes by 100 billion d. none of the above 45. You nd a 1953 quarter in some change. Why is this coin different from say a 1993 quarter? it contains silver and is thus worth more than 25 cents it contains gold and is thus worth more than 25 cents it is not any different and is worth the same as a 1993 quarter it contains lead and is thus worth less than 25 cents Lib, ler'cA Srtgr below bugvf- dicta-'23,"; 4* 564513: {'4' ' gslrczs- bmrb. n/tng. Jim.3444 0'? Ff/V ecowu'c doom? as 9's :4. f sms 3. FL 5\"\" 491% AD. as?\" aw 7 (1-6-1)? 32. Assume the multiplier is 2 and there are no crowding-out effects. An initial decrease in government purchases of $100 billion will have what effect on aggregate-demand/real GDP? a. decrease it by $200 billion. b. increase it by $200 billion. C. decrease it by $50 billion. d. None of the above is correct. The Economy in 2008 In the first half of June 2008 the effects of a housing and financial crisis coupled with a sharp increase in the price of oil were impacting the economy. 33. Refer to The Economy in 2008. The effects of the housing and financial crises on consumers could be shown by shifting a. aggregate demand to the right. b. aggregate demand to the left. C. aggregate supply to the right. d. aggregate supply to the left. 34. Refer to the Economy in 2008. The effects of increased prices of oil on suppliers could be shown by shifting a. aggregate demand to the right. b. aggregate demand to the left. C. aggregate supply to the right. d. aggregate supply to the left. 35. Economist Keynes argued that the business cycle was due mostly to swings in a. aggregate or total demand b. aggregate or total supply C. tax rates d. inflation 36. A contractionary or "tight" monetary policy utilized by the Fed to contain runaway inflation would entail a. an increase in the money supply or lowering of interest rates b. a decrease in the money supply or raising of interest rates C. raising taxes d. raising government spending on infrastructure projects 37. An expansionary or "easy" monetary policy utilized by the Fed to address a deep recession would entail a. increasing the money supply and lowering interest rates b. decreasing the money supply and raising interest rates c. raising taxes d. raising government spending on infrastructure projects 38. When faced with a deep recession, which fiscal policy can be used? a. raising government spending on infrastructure projects . lowering taxes C. increasing unemployment insurance benefits and other public assistance programs d. all of the above47. Which graph best depicts an unfavorable supply shock? SRASZ ISRAS . C PL, SRAS @ PLI . APZ AD -AD, B D PLI SRAS , PL SRAS SRASZ - AD, AD -ADe 48. Which graph best depicts the Great Depression? SRASI SRASZ . ADZ - AD D') B py | SRAS PLI SRAS - ADI X -ADI ADZ ADZ 49. The below graphs best illustrate a) expansionary monetary policy b) contractionary monetary policy c) expansionary fiscal policy d) contractionary fiscal policy Real. i-Rate PL LRAS, SRAS -reAte AD 2 1 2 ADI of $ of IFE Y 50. The below graphs best illustrate a) expansionary monetary policy b) contractionary monetary policy c) expansionary fiscal policy d) contractionary fiscal policy Real i- rate LRAS SRAS reats * 2 - ADI of YFE Y of st 8