Take Test: Module 3 Extra Credit: CartoonsTest InformationDescription So, in your futures you’ll see economic news in data releases, political speeches, mediaarticles–and in cartoons. Here are five. See if you can interpret them.InstructionsMultipleAttempts Not allowed. This test can only be taken once. ForceThis test can be saved and resumed later.Completion Save All Answers Close Window QUESTION 1 Save and Submit 1 points Save Answer Which of the following is the best explanation of this cartoon?a. The Fed may buy bonds to increase bank reserves, but the money supply increases andinterest rates fall only if banks lend the money. A decline in the money multiplier can defeat an increase in the monetary base.b. If the marginal propensity to consume in the consumption function is high, increases indisposable income will cause consumers to spend more, causing a bigger rise in aggregatedemand, and a bigger increase in output.c. If the marginal propensity to consume in the consumption function is low, increases indisposable income will cause consumers to save more, causing a smaller rise inconsumption spending, a smaller rise in aggregate demand, and a smaller increase in prices.d. The Federal Reserve can reduce interest rates to fight recession, but if interest rates stay toolow for too long, output may grow to exceed potential, and the inflation rate could rise.e. Tax cuts can add to output growth by increasing consumer spending and raising aggregatedemand. But if the tax cuts are too small, the e?ect on aggregate demand and output maybe insignificant. QUESTION 2 1 points Save Answer Which of the following is the best explanation of this cartoon?a. The Fed may buy bonds to increase bank reserves, but the money supply increases andinterest rates fall only if banks lend the money. A decline in the money multiplier can defeatan increase in the monetary base. b. If the marginal propensity to consume in the consumption function is high, increases indisposable income will cause consumers to spend more, causing a bigger rise in aggregatedemand, and a bigger increase in output. c. If the marginal propensity to consume in the consumption function is low, increases indisposable income will cause consumers to save more, causing a smaller rise inconsumption spending, a smaller rise in aggregate demand, and a smaller increase in prices.d. The Federal Reserve can reduce interest rates to fight recession, but if interest rates stay toolow for too long, output may grow to exceed potential, and the inflation rate could rise.e. Tax cuts can add to output growth by increasing consumer spending and raising aggregatedemand. But if the tax cuts are too small, the e?ect on aggregate demand and output maybe insignificant. QUESTION 3 1 points Save Answer Which of the following is the best explanation of this cartoon?a. The Fed may buy bonds to increase bank reserves, but the money supply increases andinterest rates fall only if banks lend the money. A decline in the money multiplier can defeatan increase in the monetary base.b. If the marginal propensity to consume in the consumption function is high, increases indisposable income will cause consumers to spend more, causing a bigger rise in aggregatedemand, and a bigger increase in output. c. If the marginal propensity to consume in the consumption function is low, increases indisposable income will cause consumers to save more, causing a smaller rise inconsumption spending, a smaller rise in aggregate demand, and a smaller increase in prices.d. The Federal Reserve can reduce interest rates to fight recession, but if interest rates stay toolow for too long, output may grow to exceed potential, and the inflation rate could rise.e. Tax cuts can add to output growth by increasing consumer spending and raising aggregatedemand. But if the tax cuts are too small, the e?ect on aggregate demand and output maybe insignificant. QUESTION 4 1 points Save Answer Which of the following is the best explanation of this cartoon?a. The Fed may buy bonds to increase bank reserves, but the money supply increases andinterest rates fall only if banks lend the money. A decline in the money multiplier can defeatan increase in the monetary base.b. If the marginal propensity to consume in the consumption function is high, increases in disposable income will cause consumers to spend more, causing a bigger rise in aggregatedemand, and a bigger increase in output.c. If the marginal propensity to consume in the consumption function is low, increases indisposable income will cause consumers to save more, causing a smaller rise inconsumption spending, a smaller rise in aggregate demand, and a smaller increase in prices.d. The Federal Reserve can reduce interest rates to fight recession, but if interest rates stay toolow for too long, output may grow to exceed potential, and the inflation rate could rise.e. Tax cuts can add to output growth by increasing consumer spending and raising aggregatedemand. But if the tax cuts are too small, the e?ect on aggregate demand and output maybe insignificant. QUESTION 5 1 points Save Answer Which of the following is the best explanation of this cartoon?a. The Fed may buy bonds to increase bank reserves, but the money supply increases andinterest rates fall only if banks lend the money. A decline in the money multiplier can defeatan increase in the monetary base.b. If the marginal propensity to consume in the consumption function is high, increases in disposable income will cause consumers to spend more, causing a bigger rise in aggregatedemand, and a bigger increase in output.c. If the marginal propensity to consume in the consumption function is low, increases indisposable income will cause consumers to save more, causing a smaller rise inconsumption spending, a smaller rise in aggregate demand, and a smaller increase in prices.d. The Federal Reserve can reduce interest rates to fight recession, but if interest rates stay toolow for too long, output may grow to exceed potential, and the inflation rate could rise.e. Tax cuts can add to output growth by increasing consumer spending and raising aggregatedemand. But if the tax cuts are too small, the e?ect on aggregate demand and output maybe insignificant. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Close Window Save and Submit
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