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Macro FInal Test

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5 Written Questions

5 Matching Questions

  1. The Invisible Hand
  2. Double Taxation of Profits
  3. Proportional Tax
  4. Expansionary Monetary Policy
  5. Seasonal Unemployment
  1. a Unemployment caused by seasonal changes in the demand for certain kinds of labor
  2. b a tax for which the percentage of income paid in taxes remains the same for all income levels
  3. c Taxed as corporate profits and again as dividends
  4. d A decrease in the discount rate and Federal Funds Rate which makes it cheaper for banks to borrow from the Fed and encourages banks to borrow; an open market purchase by the fed
  5. e Adam Smith's term for the natural self-regulation of a market economy driven by self-interest and efficiency

5 Multiple Choice Questions

  1. A legal entity whose liability is limited to the value of their stock
  2. the buying and selling of government securities to alter the supply of money
  3. Unemployment because the skills needed for a job do not match those of the unemployed, or the unemployed do not live where the jobs are located
  4. Peak, Recession or Depression, Trough, Expansion
  5. a tax for which the percentage of income paid in taxes increases as income increases

5 True/False Questions

  1. Expansionary Fiscal PolicyAn increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand enough to return the economy to its output, thereby reducing unemployment


  2. Horizontal Equitythe idea that taxpayers with a greater ability to pay taxes should pay larger amounts. The problem is "how much more?"


  3. Bank AssetsThings that an economic unit owns that have value


  4. Quality Biasincrease in the value of an asset


  5. Positive Statementa statement that reflects an opinion, which cannot be proved or disproved by reference to the facts


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