If the government implements a policy of increasing the money supply to stimulate economic activity, it is employing:
Expansionary monetary policy
Contractionary monetary policy
Expansionary fiscal policy
Contractionary fiscal policy
Correct Answer :
A. Expansionary monetary policy
Related Questions
The term tax incidence refers to:
The way in which the burden of a tax is shared between buyers and sellers in a market
The total amount of revenue collected by the government from taxes
The impact of a tax on the overall level of prices in an economy
The distribution of income among different households in an economy
The term liquidity refers to:
The ease with which an asset can be converted into cash without loss of value
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
The term capital gains tax is a tax on:
Profits earned from selling an asset, like a stock or real estate, at a higher price than it was purchased
Profits earned from producing and selling goods and services
Wages earned from labor
Interest earned from savings accounts
If the government increases taxes and decreases government spending, it is implementing:
Contractionary fiscal policy
Expansionary fiscal policy
Contractionary monetary policy
Expansionary monetary policy
The term monetary base refers to:
The total amount of money in circulation in an economy
The total amount of money held by banks as reserves
The total amount of money held by households and businesses
The total amount of money created by the central bank
The term circular flow of income refers to:
The continuous flow of goods and services between households and firms in an economy
The circular flow of money between households and firms in an economy
The circular flow of resources between households and firms in an economy
The circular flow of exports and imports in an open economy
The term monetary policy refers to:
Central bank policies related to interest rates and money supply to influence the economy
Government policies related to taxation and spending to influence the economy
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
The term velocity of money refers to:
The speed at which money changes hands in an economy
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
The term opportunity cost of capital refers to:
The return that could have been earned if the capital was used in an alternative investment
The total cost incurred in producing a good or service
The cost of goods and services in an open economy
The total cost of producing all units of a good or service
The term commodity money refers to:
Money that has intrinsic value, such as gold or silver
Money that is backed by the government's promise to exchange it for a commodity
Money that is used for international trade
Money that is created by the central bank
The term automatic stabilizers refers to:
Government policies that automatically adjust to stabilize the economy during economic fluctuations
The tools used by the central bank to stabilize the money supply
The policies implemented by the government to control inflation
The policies implemented by the government to control unemployment
The term capital stock in economics refers to:
The total amount of money in an economy
The total value of physical and human capital in an economy
The total amount of money held by households
The total amount of money held by businesses
The term balance of payments refers to:
A record of all economic transactions between residents of a country and the rest of the world in a given period
The difference between government revenues and expenditures in a given period
The difference between exports and imports of goods and services in a given period
The total amount of money in circulation in a country
In macroeconomics, the term inflation refers to:
An increase in the overall price level of goods and services in an economy
A decrease in the overall price level of goods and services in an economy
An increase in the purchasing power of a currency
A decrease in the purchasing power of a currency
Which of the following is a measure of the total value of all final goods and services produced within a country in a given period of time?
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Money Supply (M2)
Aggregate Demand (AD)
The long-run aggregate supply curve is vertical because it is determined by:
The level of government spending
The level of potential output
The level of aggregate demand
The level of inflation
The term commodity bundle in economics refers to:
A collection of goods and services used to calculate inflation
A collection of goods and services that a consumer typically buys
A collection of goods and services used to calculate GDP
A collection of goods and services produced in a specific industry
The term Laffer curve is used to illustrate the relationship between:
Tax rates and tax revenue
Government spending and economic growth
Inflation and unemployment
Interest rates and investment
The term deadweight loss refers to:
The loss of economic efficiency that occurs when a market is not in equilibrium
The loss of consumer surplus that occurs when prices increase
The loss of producer surplus that occurs when prices decrease
The loss of government revenue due to taxes
The term trade surplus occurs when:
Exports exceed imports
Imports exceed exports
Both exports and imports are equal
Both exports and imports are zero
The term marginal revenue refers to:
The additional revenue earned from producing one more unit of a good or service
The total revenue earned by a firm
The total cost of producing a given quantity of a good or service
The additional cost of producing one more unit of a good or service
The term frictional unemployment refers to unemployment that occurs due to:
Temporary transitions between jobs or careers
Mismatch between the skills of workers and the skills required by employers
Changes in aggregate demand
Fluctuations in the business cycle
The multiplier effect refers to:
The impact of an initial change in spending on aggregate demand and, consequently, on real GDP
The tendency of consumers to save a large portion of their income
The effect of an increase in the money supply on interest rates
The impact of inflation on purchasing power
Which of the following is a tool of monetary policy used by the Federal Reserve?
Open market operations
Government spending
Taxation
Fiscal stimulus
The term structural unemployment refers to unemployment that occurs due to:
Mismatch between the skills of workers and the skills required by employers
Fluctuations in the business cycle
Temporary transitions between jobs
Changes in aggregate demand
The term economic rent refers to:
Payment for the use of land or other natural resources that is in excess of what is needed to bring the resource into production
The payment for the use of capital goods in production
The total revenue earned by a firm
The total cost of producing a good or service
The term liquidity trap refers to a situation where:
Interest rates are so high that people prefer to hold cash rather than invest or spend
Interest rates are so low that people prefer to hold cash rather than invest or spend
Inflation is high, leading to a decrease in the purchasing power of money
The central bank loses control over the money supply
If the government runs a budget deficit, it means that:
Government spending exceeds government revenue
Government revenue exceeds government spending
Government revenue and spending are equal
Taxes are too high
The term fiscal policy refers to:
Government policies related to taxation and spending to influence the economy
Central bank policies related to interest rates and money supply
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
The term money market refers to:
The market for financial assets with maturities of one year or less
The market where foreign exchange rates are determined
The market for long-term government bonds
The market for commodities like gold and silver