Which of the following policies will lead to the largest increase in income

Long Term Capital Management (LTCM) sold put options on European equity indexes: Question 1 options: Show more Long Term Capital Management (LTCM) sold put options on European equity indexes: Question 1 options: LTCM was hoping that European equity index volatility would rise substantially above normal levels. LTCM was zeroing out the call options that it had also sold on European equity indexes. LTCM was hoping that European stock prices would decrease by a significant amount. LTCM was hoping that European equity index volatility would calm down to normal levels. In response to Long Term Capital Management (LTCM): Question 2 options: The bailout of LTCM resulted in a ban on all derivatives trading by hedge funds. The government allowed derivatives trading to continue without regulation. In 2002 the Sarbanes-Oxley Act was passed to impose significant regulations on derivatives trading. The government saw the benefits of unregulated hedge funds and fully deregulated derivatives trading. Save Which of the following did not contribute to positive economic growth during the 2002-2006 years: Question 5 options: Deregulation of the financial sector allowed Wall Street to generate an increase in revenues. A significant increase in real median household income resulted in increases in consumption. A significant increase in housing values resulted in increases in consumption as homeowners refinanced existing mortgages. A minimal change in long term interest rates. In regards to the U.S. housing market during the 20th century: Question 7 options: Adjusting for inflation the average annual increase in housing prices was above 5% a year. Adjusting for inflation the average value of a home in the year 2000 was below its value in the year 1900. Adjusting for inflation the average annual increase in housing prices exceeded the annual return on stocks. Adjusting for inflation the average annual increase in housing prices was below 1% a year. Which of following will make the tax system more progressive or less regressive: Question 8 options: A reduction in the tax rate on capital gains from 20% to 15%. A reduction in the tax rate on dividends from 20% to 15%. A payroll tax cut combined with an increase in the cap level. A reduction in the top federal income tax rate from 39% to 35%. In 2011 and 2012 President Obama decreased the payroll tax rate: Question 11 options: Since the wealthy are exempt from the payroll tax they received no benefit from the tax cut. While the benefits of the payroll tax cuts were about the same across income groups the middle class received a smaller share in comparison to the Bush income tax cuts. The benefits of the tax cut were about the same for the middle class as they were for the wealthy (top 20%). Almost of the tax cuts were realized by the top 10% of income earners. Which of the following policies will lead to the largest increase in income: Question 12 options: A $100 billion tax cut and the Federal Reserve allows interest rates to increase. An increase in government spending by $100 billion and the Federal Reserve allows interest rates to increase. An increase in government spending by $100 billion and the Federal Reserve holds interest rates constant. A $100 billion tax cut and the Federal Reserve holds interest rates constant. Which of the following policies has the greatest positive effect on GDP? Assume the Federal Reserve has the same policy for each option. Question 13 options: Lower the payroll tax rate. Reduce the capital gains tax rate. Increased government spending on infrastructure. Reducing federal aid to state governments. Save Which of the following not accurate in regards to crowding out: Question 14 options: Crowding out will decrease the value of the fiscal policy multipliers. Crowding out only takes place with increases in government spending but not with tax cuts. Crowding out will be minimized if the Federal Reserve increases the money supply with expansionary fiscal policies. Crowding out refers to a decrease in business investment. With an expansionary fiscal policy crowding out is minimized if: Question 15 options: The Federal Reserve maintains constant interest rates. The government spends the money on capital equipment. The Federal Reserve allows interest rates to increase. A tax cut encourages private consumption of durable goods. Show less

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