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1. Shifts in the aggregate-demand curve can cause fluctuations in
a.
neither the level of output nor the level of prices.
b.
the level of output, but not in the level of prices.
c.
the level of prices, but not in the level of output.
d.
the level of output and in the level of prices.
2. Fiscal policy affects the economy
a.
only in the short run.
b.
only in the long run.
c.
in both the short and long run.
d.
in neither the short nor the long run.
3. Shifts in aggregate demand affect the price level in
a.
the short run but not in the long run.
b.
the long run but not in the short run.
c.
both the short and long run.
d.
neither the short nor long run.
4. Monetary policy and fiscal policy influence
a.
output and prices in the short run and the long run.
b.
output and prices in the short run only.
c.
output in the short run and the long run.
d.
output in the short run only.
5. Monetary policy is determined by
a.
the president and Congress and involves changing government spending and taxation.
b.
the president and Congress and involves changing the money supply.
c.
the Federal Reserve and involves changing government spending and taxation.
d.
the Federal Reserve and involves changing the money supply.
6. Fiscal policy is determined by
a.
the president and Congress and involves changing government spending and taxation.
b.
the president and Congress and involves changing the money supply.
c.
the Federal Reserve and involves changing government spending and taxation.
d.
the Federal Reserve and involves changing the money supply.
7. A goal of monetary policy and fiscal policy is to
a.
offset the shifts in aggregate demand and thereby eliminate unemployment.
b.
offset shifts in aggregate demand and thereby stabilize the economy.
c.
enhance the shifts in aggregate demand and thereby create fluctuations in output and employment.
d.
enhance the shifts in aggregate demand and thereby increase economic growth
8. The Federal Open Market Committee is
a.
the group at the Federal Reserve that sets monetary policy.
b.
in charge of tax collection.
c.
the group that sets the amount of government spending.
d.
the group that reviews income assistance programs.
