STRAYER BUS475 midterm exam (2015 version) 50 questions

STRAYER BUS475 midterm exam



Q1. To decrease the nation's money supply, the Fed can

increase reserve requirement.

decrease reserve requirements.

decrease the discount rate.

buy government securities in the open market.

Q2. In the long-run framework, budget surpluses

should be run whenever output dips below potential output.

should never be run since they crowd out investment in the short run.

are better than budget deficits over the long run because unlike budget deficits, they increase
saving and investment.

should be run on a permanent basis since they boost saving and investment and stimulate
economic growth.

Q3. Which of the following will decrease the nominal deficit?

An increase in taxes

An increase in government expenditures

An increase in interest rates

An increase in the debt

Q4. If a country's trade deficit increases, then

its consumption must be falling relative to its production.

its consumption must be rising relative to its production.

it must be buying more assets from foreigners.

it must be selling fewer assets to foreigners.