B. An increase in discretionary government spending

C. An increase in corporation tax

D. Lower interest rates

A. fiscal drag

B. debt burden

C. bracket creep

A. decrease

B. remain the same, as long as bank hold no excess reserves

C. could either increase or decrease

A. The actions of the central bank in controlling the money supply

B. The governments attitude to taxation

C. The government regulation of financial intermediaries

A. the time that it takes for policy makers to recognize the existence of boom of bust

B. the time needed for parliament to agree to a tax cut.

D. the time that is necessary to put the desired policy into effect

A. unrelated to central bank action

B. the same as it is for fiscal policy

D. mush longer than it is for fiscal policy

A. Tax banks increase with inflation

B. Government spending falls to reduce aggregate demand

D. Tax rates move inversely with inflation

A. taxes paid by firms and households to the government minus the cost of collecting the taxes

B. government expenditures minus government revenues

D. Taxes paid by firms and households to the government plus transfer payments made to firm and households

A. the change in exports and imports prices

C. the foreign response to price changes

D. the change in exchange rates

A. Stay the same

C. Improve

D. Increase with inflation

B. what the government borrows cannot be used for private investment

C. credit rationing

D. Bank of England controls on commercial bank lending

A. Margaret Thatcher

C. John Maynard Keynes

D. Ronald Reagan

A. The amount of tax paid will increase by Rs 800

B. The amount of tax paid will increase by Rs4,800

C. The amount of tax paid will increase by Rs4,000

B. decrease; decrease

C. increase: increase

D. decrease; increase

B. not allowing commercial banks to issue notes and coins

C. controlling the money multiplier

D. restricting the amount of cash in circulation

B. reduce the minimum reserve asset ratio.

C. sell government securities on the open market

D. lower interest rates

A. increase; decrease

B. decrease; decrease

C. increase; increase

B. increase the minimum reserve asset ratio.

C. sell government securities on the open market

D. raise interest rates

A. liquidity ratio

B. required reserve ratio

C. banks line of credit

B. Discourage consumption of negative externalities

C. Discourage consumption of public goods

D. Discourage consumption of positive externalities

A. The total tax paid / total income

B. Change in income / change in tax paid

C. Total income / total tax paid

A. The amount of tax paid increase with income

B. The average rate of tax is constant as income increases

C. The marginal rate of tax decrease with more income

B. monetary policy can only be effective if it is a long-term policy

C. the money supply must only expand at the rate of growth of real national income

D. bad money drives out good

A. A measure of the countrys trade position

B. A measure of the countrys total debt

D. A measure of the governments monetary stance

A. GDP decrease rapidly

C. GDP remains unchanged

D. GDP decrease slightly

B. sells government securities on the open market

C. buys government securities on the open market

D. sells less government bonds than are required to finance the PSBR

A. This will have no effect on the governments budget position

B. The governments budget position should automatically improve

D. This will reduce the governments tax revenue

A. is not sufficiently stimulating or contracting the economy at any time

C. is desirable

D. is effective

B. 25%

C. Rs 50000

D. Rs 10000