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11. Fiscal
policy involves government spending and taxation policies. True False
12. An
increase in reserve requirements by the Federal Reserve would decrease the
money supply. True False
13. A federal
deficit will always expand the money supply. True False
14. The
change in real GDP is often inversely related to inflation. True False
15. Real GDP
and the consumer price index appear to move up and down together. True False
16. In the
last few years (since 2001), the trade deficit has increased dramatically. True
False
17.
Monetary policy can be implemented very quickly to
reinforce fiscal policy or, when necessary, to offset the effects of fiscal
policy.
True False
2
25.
Purchasing securities in open market operations by
the Federal Reserve has the same effect as increasing reserve requirements.
True False
26. The most
widely used tool of monetary policy is open market operations. True False
27. The
composite index of leading indicators has shown little variation in its ability
to predict. True False
28.
The fact that many studies have found a
significant relationship between the money supply and stock prices has been
quite helpful to investors.
True False
29. Leading
indicators tend to give longer warnings before peaks than troughs. True False
30.
Leading indicators change direction in advance of
general business conditions and are of prime importance to investors who want
to forecast rising profits and stock prices.
True False
31. Various
industries are so different that no common factors exist among them for
purposes of analysis. True False
32.
One sign that the recession beginning in 1990 was
very painful was that many large companies such as AT&T, IBM and GM
announced significant reductions in their work forces.
True False
33.
The U.S. government has had only ten years between
1977 and 2007 where a surplus occurred because government revenues were greater
than expenditures.
True False
34. Every
year since 1980, the U.S. has imported more goods than it has exported. True
False