16 17 18

16

100

Shifts in I are shown on our graph for the...

Long term capital market

200

To shift I to the right, the FOMC will...

Buy bonds

300

To shift I to the left, the FOMC will

Sell bonds

400

Buying bonds will _____ interest rates

Decrease

500

When a bubble bursts we get a credit crunch b/c banks no longer have as much money as they used to. The Fed buys bonds to make up for this.

Some people are concerned this will encourage risky behavior by the banks since any mistake they make the Fed will bail them out...this is called a ______

Moral Hazard

17

100

What is the main policy tool in fiscal policy?

G-T or budget position

200

We run a budget deficit to...

Stimulate the economy/shift AD right

300

We run a budget surplus to...

Contract the economy/shift AD left

400

Government borrowing from the long term capital market is concerning for non-interventionists b/c they fear private investment will be...

Crowded out due to rising interest rates

500

When the government borrows money in the long term capital market it raises interest rates. This, according to noninterventionists, will attract foreign capital and thus _________ the US dollar and hurt exports and act as a drag on AD

Strengthen

18

100

Trade as a positive sum game

Free Traders

200

Trade as a zero sum game

Mercantilism

300

How does China cheat in trade?

Peg their currency to the dollar

400

China's money is called

Yuan

500

Organization that kind of regulates international trade

WTO

Mystery

100

What state did I attend undergrad in?

Tennessee

200

Who was the leader of the Free French during WW2?

Charles De Gaulle

300

The Lone Star State

Texas

400

FOMC

Federal Open Markets Committee

500

There’s a one-story house in which everything is yellow. Yellow walls, yellow doors, yellow furniture. What color are the stairs?

There aren’t any—it’s a one-story house.