Question 1

Analysis of U.S.growth rates shows that growth rate of output tends to be highest in which year of a presidential administration?

Accepted Answer

The answer of Analysis of U.S.growth rates shows that growth...

Question 2

Based on an analysis of macroeconomic outcomes under Republican and Democratic administrations,we would expect which of the following to occur?

Accepted Answer

There is no consistent pattern in the macroeconomic outcomes under Republican and Democratic administrations. Economic performance is influenced by various factors such as global economic conditions, policies implemented by the administration, and natural disasters or events. Therefore, it is not possible to predict macroeconomic outcomes based solely on political party affiliation of the administration.

Question 3

In ________,would-be members of the Euro area signed the Stability and Growth Pact (SPG).

Accepted Answer

The Stability and Growth Pact (SGP) was signed in 1997 by would-be members of the Euro area to ensure fiscal discipline within the European Union by setting limits on government deficit and debt.

Question 4

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

Accepted Answer

The 1990 "Budget Enforcement Act" implemented spending caps as one of its main rules. A flat tax rate, indexation of income tax brackets, and consumption tax were not part of this act.

Question 5

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

Accepted Answer

The Budget Enforcement Act was passed in 1990 and one of its main rules was the PAYGO (Pay-As-You-Go) rule, which required any new direct spending or tax cuts to be offset by budget cuts or revenue increases to prevent an increase in the federal deficit.

Question 6

Assume that political business cycles do not exist.Given this assumption,we would expect,all else fixed,the output growth to be highest in which period?

Accepted Answer

Assuming political business cycles do not exist, there is no systematic relationship between output growth and any particular period related to elections or administrations. Output growth could be high in any period depending on various other factors such as consumer and investor confidence, government policies, global economic conditions, and business cycles. Therefore, none of the given choices would be a reliable predictor of the highest output growth.

Question 7

Those who are concerned about balanced budget amendments typically argue that balanced budget amendments

Accepted Answer

Balanced budget amendments would make fluctuations in output around the natural level of output greater because the government would have to cut spending or raise taxes in response to deficits, which would exacerbate economic downturns. Higher interest rates, reduced national savings, and increased spending in a recession are not necessarily direct consequences of a balanced budget amendment.

Question 8

Democratic administrations generally are relatively more concerned about which of the following?

Accepted Answer

Democratic administrations generally prioritize reducing the unemployment rate as part of their economic policy. They may also prioritize policies aimed at reducing income inequality, expanding social welfare programs, and increasing government spending on education and infrastructure.

Question 9

The PAYGO rule was allowed to expire in which year?

Accepted Answer

The answer of The PAYGO rule was allowed to expire...

Question 10

Fine tuning represents which of the following?

Accepted Answer

Fine tuning refers to the policy makers' attempts to adjust monetary and fiscal policies to minimize the deviations of actual output from the natural level of output. The natural level of output refers to the level of output that would be produced by the economy in the absence of any shocks or disturbances. The aim of fine-tuning is to maintain stable economic growth, low levels of inflation, and low unemployment.

Question 11

During democratic presidential administration since 1948,economic growth was highest in ________ year of the administration?

Accepted Answer

The answer of During democratic presidential administration since 1948,economic growth...

Question 12

During republican presidential administration since 1948,economic growth was highest in ________ year of the administration?

Accepted Answer

The highest economic growth during republican presidential administrations since 1948 occurred in the fourth year of the administration. This is because it takes time for economic policies and reforms to take effect and stimulate growth, thus the highest growth is often seen towards the end of a presidential term.

Question 13

Which of the following policies toward kidnappings would you recommend to authorities?

Accepted Answer

The answer of Which of the following policies toward kidnappings...

Question 14

Republican administrations generally are relatively more concerned about which of the following?

Accepted Answer

Republican administrations typically prioritize policies aimed at reducing the rate of inflation, often through measures such as controlling government spending and adjusting interest rates, reflecting their broader economic philosophy focused on fiscal conservatism and market-driven solutions.

Question 15

The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area.

Accepted Answer

The Masstricht treaty set the budget ratio to GDP cap at 60% in order for countries to qualify to join the Euro area.

Question 16

Who is best known for arguing about the long and variable lags of monetary policy?

Accepted Answer

Milton Friedman is best known for his argument about the long and variable lags of monetary policy, which suggests that the effects of changes in monetary policy on the economy may take a long time to materialize and may be unpredictable.

Question 17

Analysis of U.S.budget deficits in the United States between 1990 and 2000 indicates that which of the following is primarily responsible for the reduction in the budget deficit?

Accepted Answer

The reduction in the budget deficit between 1990 and 2000 was primarily due to a combination of decreased spending and increased tax revenues. Lower interest rates and increased tax rates may have contributed to some extent, but the main factor was the balanced approach of reducing spending and increasing revenue.

Question 18

Arguments for placing restraints on policy makers fall into which of the following?

Accepted Answer

The answer of Arguments for placing restraints on policy makers...

Question 19

Assume a country has presidential elections every three years.If a political business cycle exists in this country,explain any differences in the average annual growth rates of output for each year of a typical administration.

Accepted Answer

The answer of Assume a country has presidential elections every...

Question 20

The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area.

Accepted Answer

The Masstricht treaty, signed in 1992, set the budget ratio to GDP to be below 3% as one of the convergence criteria for countries to qualify to join the Euro area. This criterion is known as the "Stability and Growth Pact" and aims to ensure that countries have sustainable finances before adopting the Euro.

Quiz 21: Should Policy Makers Be Restrained

Analysis of U.S.growth rates shows that growth rate of output tends to be highest in which year of a presidential administration?

Based on an analysis of macroeconomic outcomes under Republican and Democratic administrations,we would expect which of the following to occur?

In ________,would-be members of the Euro area signed the Stability and Growth Pact (SPG) .

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

Assume that political business cycles do not exist.Given this assumption,we would expect,all else fixed,the output growth to be highest in which period?

Those who are concerned about balanced budget amendments typically argue that balanced budget amendments

Democratic administrations generally are relatively more concerned about which of the following?

The PAYGO rule was allowed to expire in which year?

Fine tuning represents which of the following?

During democratic presidential administration since 1948,economic growth was highest in ________ year of the administration?

During republican presidential administration since 1948,economic growth was highest in ________ year of the administration?

Which of the following policies toward kidnappings would you recommend to authorities?

Republican administrations generally are relatively more concerned about which of the following?

The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area.

Who is best known for arguing about the long and variable lags of monetary policy?

Analysis of U.S.budget deficits in the United States between 1990 and 2000 indicates that which of the following is primarily responsible for the reduction in the budget deficit?

Arguments for placing restraints on policy makers fall into which of the following?

Assume a country has presidential elections every three years.If a political business cycle exists in this country,explain any differences in the average annual growth rates of output for each year of a typical administration.

The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area.