Welcome to “AP Macro Unit 4 Lesson 4 – Spring 2011” where we’ll be taking a look at a whole host of questions regarding the Fiscal policy – the means by which governments can adjust their spending levels and tax rates to influence a country’s economy – as well as the Aggregate Demand-Aggregate Supply Model.
I only
II only
III only
I and III only
I, II and III
An interest rate cut initiated by the central bank
An increase in payments to the unemployed initiated by the state of the economy
An increase in the quantity of money initiatied by the central bank
A tax cut initiated by an act of Congress
All of the above
Increasing taxes on households and firms
Increasing government spending on goods and services
Decreasing government transfer payments
Decreasing interest rates
Increasing the money supply
Decreasing taxes
Decreasing government spending on goods and services
Increasing government transfer payments
Increasing interest rates
Decreasing the money supply
Inflationary gap; increases aggregate demand
Inflationary gap; decreases aggregate demand
Recessionary gap; increases aggregate demand
Recessionary gap; decreases aggregate demand
Recessionary gap; decreases aggregate demand