34. The four major expenditure categories of gross domestic product (GDP) are co

Question

34. The four major expenditure categories of gross domestic product (GDP) are consumption, imports, exports, and government purchases a. b. consumption, government purchases, taxes, and investment. c. consumption, investment, government purchases, and net exports. d. consumption, investment, government purchases, and stocks. e. consumption, investment, taxes, and net exports. 35. Expansionary monetary policy occurs when a. a central bank acts to decrease the money supply in an effort to stimulate the economy. b. Congress and the president increase taxes in an effort to stimulate the economy. c. Congress and the president decrease taxes in an effort to stimulate the economy d. a central bank acts to increase the money supply in an effort to stimulate the economy. e. a central bank acts to increase government spending in an effort to stimulate the economy. 36. Holding all else constant, in the short run, an increase in the money supply can cause a(n) a. increase in unemployment. b. increase in real gross domestic product (GDP). c. lower rate of inflation. d. decrease in the price level. decrease in real gross domestic product (GDP). 7. As the prices of goods and services increase, the value of money a. stays the same. b. increases. c. decreases increases initially and then decreases. decreases initially and then increases. d. e. 38. Contractionary monetary policy occurs when a. Congress and the president increase taxes in an effort to control an economy that is expanding too quickly. Congress and the president decrease taxes in an effort to stimulate the economy c. a central bank acts to increase the money supply in an effort to stimulate the economy d. a central bank acts to increase government spending in an effort to stimulate the econ e. a central bank acts to decrease the money supply in an effort to control an eco expanding too quickly

Explanation / Answer

Q.34. Option c. GDP = C+I+G+NX
NX=(export-imports)
Q.35. Option d. By increasing the money supply the access to money supply increases which increases investment opportunities and hence economy expands
Q.36. Option b Increase in investment and hence the growth of GDP increases
Q.37. Option c value of money and price level are inversely related
Q.38. Option e. It is applied to reduce the growth of economy in order to avoid economic bursts

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