1.If the federal deficit was $3 trillion, economic growth was 2%, and the unempl
ID: 1161923 • Letter: 1
Question
1.If the federal deficit was $3 trillion, economic growth was 2%, and the unemployment rate was 10%, a functional finance economist would suggest increasing taxes in order to balance the budget.
A.
True
B.
False
2. In a global economy, a problem with using fiscal and monetary policies to fix the problems in our country is that those policies:
A.
make our trade balance deteriorate.
B.
are more likely to help other countries than to help us.
C.
can lead to retaliatory actions by other nations.
D.
become completely ineffective.
3.
When the growth in productivity is _____ the rate of change in wages, inflation is _____, and the level of unemployment at that point is _____ the natural rate of unemployment.
A.
equal to; zero; equal to
B.
equal to; negative; less than
C.
greater than; positive; less than
D.
less than; zero; greater than
5.
Which of the following statements about fiscal policy and aggregate supply is correct?
A.
Fiscal policies that influence aggregate supply take less time to implement than do demand-side fiscal policies.
B.
Fiscal policies that influence aggregate supply increase inflationary pressures as output expands.
C.
The focus of fiscal policy and aggregate supply is to reduce unemployment.
D.
Fiscal policies that influence aggregate supply do not always require tradeoffs between price levels and output.
6.
7.
A.
True
B.
False
2. In a global economy, a problem with using fiscal and monetary policies to fix the problems in our country is that those policies:
A.
make our trade balance deteriorate.
B.
are more likely to help other countries than to help us.
C.
can lead to retaliatory actions by other nations.
D.
become completely ineffective.
3.
When the growth in productivity is _____ the rate of change in wages, inflation is _____, and the level of unemployment at that point is _____ the natural rate of unemployment.
A.
equal to; zero; equal to
B.
equal to; negative; less than
C.
greater than; positive; less than
D.
less than; zero; greater than
5.
Which of the following statements about fiscal policy and aggregate supply is correct?
A.
Fiscal policies that influence aggregate supply take less time to implement than do demand-side fiscal policies.
B.
Fiscal policies that influence aggregate supply increase inflationary pressures as output expands.
C.
The focus of fiscal policy and aggregate supply is to reduce unemployment.
D.
Fiscal policies that influence aggregate supply do not always require tradeoffs between price levels and output.
6.
7.
QUESTION 4 1.0000 Graph: Consumption) Based on the information provided in the graph, at an income level of $300, savings equalsthe MPC and the APC equals 1,200 1,100 1,000 900 800 700 c 600 500 400 300 200 100 450 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Income (thousands) A $300; 0.4: 0.5 O B. $80; 0.6;-0.27 O C-5120; 0.4;-0.7 D-580, 0.6;1.27Explanation / Answer
1. Option B. By increasing tax rates, the unemployment rate increases which reduces the output and consumption and further increases deficit
2. Option D. The monetary and fiscal policies are used to stabilize economic growth which may not be effective if it is problematic
3. Option A, as there would not be impact of inflation as growth and wages grow equally
5. Option D, as both can influence employments
6. Option D
7. Option C
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