Answer Happy

QUESTION 37 Due to automatic stabilizers, when income rises, government transfer spending: increases and tax revenues decrease. O and tax revenues decrease. and tax revenues increase. O decreases and tax revenues increase. QUESTION 38 If m equals the maximum number of new dollars that can be created for a single dollar of excess reserves and R equals the required reserve ratio, then for the banking system: Om=R-1. OR=m-1. Om=1/R OR=m/1. QUESTION 39 The cyclically adjusted surplus as a percentage of GDP is 1 percent in year 1. This surplus becomes a deficit of 2 percent of GDP in year 2. It can be concluded from year 1 to year 2 that: Ofiscal policy was expansionary. O the federal government is increasing its spending. Ofiscal policy was contractionary. O the federal government is decreasing taxes. QUESTION 40 An increase in business taxes would tend to: O increase aggregate demand and decrease aggregate supply. decrease aggregate demand and increase aggregate supply. O increase aggregate demand and increase aggregate supply. decrease aggregate demand and decrease aggregate supply. O