Question 1

Which of the following policies is a positive supply-side lever?

Accepted Answer

A) Human capital investment. 
B) Lowering the minimum reserve requirement. 
C) Open market operations. 
D) Income transfers. 
A) Human capital investment. 
B) Lowering the minimum reserve requirement. 
C) Open market operations. 
D) Income transfers.

Question 2

The total quantity of output producers are willing and able to supply at alternative price levels in a given time period is

Accepted Answer

A) Aggregate demand. 
B) Aggregate supply. 
C) Market demand. 
D) Market supply. 
A) Aggregate demand. 
B) Aggregate supply. 
C) Market demand. 
D) Market supply.

Question 3

Employee benefits mandated by the government make it

Accepted Answer

A) Easier to achieve full employment with stable prices. 
B) More difficult to achieve full employment with stable prices. 
C) Easier to achieve stable prices but more difficult to achieve full employment. 
D) Easier to achieve economic growth. 
A) Easier to achieve full employment with stable prices. 
B) More difficult to achieve full employment with stable prices. 
C) Easier to achieve stable prices but more difficult to achieve full employment. 
D) Easier to achieve economic growth.

Question 4

The trade-off between unemployment rates and inflation originates in the

Accepted Answer

A) Vertical AS curve. 
B) Downward-sloping AS curve. 
C) Upward-sloping AD curve. 
D) Upward-sloping AS curve. 
A) Vertical AS curve. 
B) Downward-sloping AS curve. 
C) Upward-sloping AD curve. 
D) Upward-sloping AS curve.

Question 5

Refer to Figure 16.4.If the economy is initially in equilibrium at P3 and Q1,which of the following policies would move the economy to equilibrium at P2 and Q3?

Accepted Answer

A) Contractionary monetary policy alone. 
B) A combination of restrictive fiscal policy and restrictive monetary policy. 
C) Restrictive supply-side policy alone. 
D) A combination of expansionary monetary policy and expansionary supply-side policy. 
A) Contractionary monetary policy alone. 
B) A combination of restrictive fiscal policy and restrictive monetary policy. 
C) Restrictive supply-side policy alone. 
D) A combination of expansionary monetary policy and expansionary supply-side policy.

Question 6

Supply-side economists advocate

Accepted Answer

A) A reduction in the incentives to save so that more income will be spent. 
B) A reduction in structural unemployment through worker training. 
C) The use of minimum wage laws to guarantee fair wages for workers. 
D) An increase in transfer payments. 
A) A reduction in the incentives to save so that more income will be spent. 
B) A reduction in structural unemployment through worker training. 
C) The use of minimum wage laws to guarantee fair wages for workers. 
D) An increase in transfer payments.

Question 7

The Personal Responsibility and Work Opportunity Act of 1996

Accepted Answer

A) Increased aggregate demand. 
B) Increased aggregate supply. 
C) Decreased aggregate demand. 
D) Decreased aggregate supply. 
A) Increased aggregate demand. 
B) Increased aggregate supply. 
C) Decreased aggregate demand. 
D) Decreased aggregate supply.

Exam 16: Supply-Side Policy: Short-Run Options

Which of the following policies is a positive supply-side lever?

The total quantity of output producers are willing and able to supply at alternative price levels in a given time period is

Employee benefits mandated by the government make it

The trade-off between unemployment rates and inflation originates in the

Refer to Figure 16.4.If the economy is initially in equilibrium at P3 and Q1,which of the following policies would move the economy to equilibrium at P2 and Q3?

Supply-side economists advocate

The Personal Responsibility and Work Opportunity Act of 1996

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

Filters

Refer to Figure 16.4.If the economy is initially in equilibrium at P₃ and Q₁,which of the following policies would move the economy to equilibrium at P₂ and Q₃?