Economics Principles and Practices © 2012 Georgia

Chapter 15: Economic Stabilization Policies

Self-Check Quizzes

1
The aggregate demand is like the aggregate supply for all the following reasons EXCEPT the aggregate demand _____.
A)is a summary measure of the economy
B)can be represented in a graph
C)can either decrease or increase
D)measures goods and services demanded
2
The curve in the aggregate demand curve slopes downward and to the right because when _____.
A)prices are high, the demand is high
B)prices go down, the demand goes down
C)prices go down, the demand goes up
D)prices go up, demand stays the same
3
A factor that would shift the aggregate demand curve right would be ______.
A)less saving
B)higher taxes
C)less spending
D)lower transfer payments
4
Aggregate supply and demand curves are useful for all the following purposes EXCEPT ______.
A)analyzing equilibrium
B)making exact predictions
C)examining price stability
D)studying economic growth
5
An approach that places primary importance on the role of money and its growth is _______.
A)monetarism
B)Laffer curve
C)wage-price controls
D)unemployment insurance
6
Money that workers who lose their jobs through no fault of their own can collect for a limited amount of time is ______.
A)multiplier
B)monetarism
C)unemployment insurance
D)automatic stabilizer
7
Which of the following describes “supply-side” policies?
A)reduce government regulations to increase output
B)stimulate consumption of goods and services
C)cut taxes or increase government spending to put money in people’s hands
D)raise taxes on businesses to provide funds for spending programs
8
Passive fiscal policies contribute to the stability of the American economy because they ______.
A)take time to implement once a problem has been identified
B)often outlast the economic problem they were meant to fix
C)automatically provide stability when the economy worsens
D)require funding and budget caps that limit federal spending
9
An example of a passive fiscal policy is ______.
A)increased appropriations for highway construction
B)Social Security and Medicare reforms
C)unemployment insurance
D)tax code reform
10
Today, economists know enough to devise policies to aid in all the following tasks EXCEPT ______.
A)prevent major depressions
B)avoid minor recessions
C)stimulate economic growth
D)help disadvantaged groups with inflation
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