Fiscal Policy

1. What event in the 1930s emphasized the importance of looking at the economy in terms of macroeconomic policy

a. WWII

b. Great Depression

c. GDP

d. Macroeconomics

2. As a result of the Great Depression, many nations would eventually move awayfrom free market economies and turn towhat type of government leaders?

a. fascist

b. Kings and Queens

c. Presidential

d. Anarchist

3. Macroeconomics was born as a defense of the market system, and the main fix for a market economy turns out to be a change in government involvement.What role does the government need to take during hard economic times.

a. a larger role

b. a smaller role

c. assume control over the country

d. Wait and let the problem fix itself

4. Macroeconomic policy emphasized the use of two key government tools to stabilize the economy. What are the two policies?

a. monetary and Fiscal Policy

b. Business Cycles and GDP

c. Supply and Demand

d. Savings and Banking

5. When was the federal reserve created?

a. 1313

b. 1945

c. 1930

d. 1891

6. According to an old French economist named Say, what does supply create?

a. Demand

b. Surplus

c. Shortage

d. depressions

7. What did markets teach us about prices and wages that help to prolongunemployment rates?

a. They are sticky

b. They are flexible

c. prices should be regulated by the Government

8. As a nation's economy grows to the point of inflation, what happens to the wages of individuals?

a. It takes time for wages to grow. (Sticky wages)

b. wages will automatically adjust to market conditions.

c. People just stop spending.