Question
Which of the following is a counter-cyclical fiscal policy when the economy is experiencing high inflation? a.An increase in transfer payment spending. b.An increase in
Which of the following is a counter-cyclical fiscal policy when the economy is experiencing high inflation?
a.An increase in transfer payment spending.
b.An increase in the federal funds rate.
c.A decrease in the required reserve ratio.
d.An increase in taxes.
During and after World War II, the U.S. Treasury Department took control of monetary policy.They did this by
a.setting a target interest rate, and requiring the Federal Reserve to adjust the money supply to meet that target.
b.setting a target money supply, and requiring the Federal Reserve to adjust the interest rate to meet that target.
c.setting a target budget balance, and requiring the Federal Reserve to adjust tax rates to meet that target.
d.setting a target tax rate, and requiring the Federal Reserve to adjust the budget balance to meet that target.
The 1920's saw one of the best economies of the 20thcentury, with stable prices, rapid output growth, low unemployment rates and only two mild recessions.One reason was Fed policy, because
a.the Fed responded to recessions by raising taxes and laying off employees.
b.the Fed responded to recessions by raising the discount rate and selling Treasury bonds.
c.the Fed responded to recessions by reducing the discount rate and buying Treasury bonds.
d.the Fed responded to recessions by reducing taxes and hiring more employees.
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