* Macroeconomic Aims
The government hopes to maintain stable prices and prevent severe fluctuations in the economy is called Price Stability. True or False
True
Deficit means that spending<taxes True or False
False spending>taxes
Broad conclude cash and bank current account
True or False
fa l se
A sustained increase in the general price level of goods or services is called inflation T/F
True
If prices are rising too fast, the central bank usually lower interest rates T/F
False
What are the macroeconomic goals related to the national employment rate?
Low Unemployment
If the economy is overheating, the government may reduce spending or increase taxes. What is this policy called?
Contractionary Fiscal Policy
What institution typically controls monetary policy in most countries?
Centrual Bank
If a cup of coffee rises from $2 to $2.20 in a year, what is this called
inflation
If a government increases unemployment benefits during a recession.What type of fiscal policy is it?"
Expansionary
If the inflation rate is too high, the central bank may raise interest rates.Why？
To reach Price stability
If the government cuts taxes to boost consumer spending. What type of fiscal policy is this?
Expansionary fiscal policy
When will central bank low the interest rates to reduce spending?
When inflation is high
If inflation falls from 8% to 3%, is this disinflation or deflation?"
Disinflation
Deflation makes debt harder to repay. Which macroeconomic aim does this threaten
Price Stability
If the government wants to boost the GDP, which macroeconomic goal should they prioritize?
Economic Growth
If a government runs a budget deficit to stimulate growth, what risk might it face？
Inflation
How does monetary policy differ from fiscal policy in terms of who implements it?
Monetary policy controlled by central bank; fiscal policy is controlled by government
Why is deflation dangerous for an economy
Because people delay purchases
During deflation should the government spend more or less to help the economy?
Spend more
Why do some countries aim to increase the employment rate?
Because people can contribute to productivity. The government doesn't need more money to provide subsidies.
Why might fiscal policy take longer to work than monetary policy?"
Because it needs time to pass
Why might very low interest rates make monetary policy less effective?
make low borrowing impact
How to fight with bad deflation?
cut interest rates
If a country has high unemployment, name one thing the governments or central banks couldhelp?
Governments should create jobs program