Question

QUESTION 21

Of the following fiscal programs, which has the biggest effect, per dollar, on aggregate demand?

a		unemployment compensation during depressions
b		unemployment compensation during near-full employment
c		Aid to Families with Dependent Children
d		the space shuttle program
e		milk subsidies

QUESTION 22

One lesson of the Great Depression was that potential GDP could

a		be too low to ensure full employment if the population was growing
b		be too low to ensure full employment in a capitalist economy
c		be too low to ensure full employment in a market economy
d		fall short of full-employment GDP
e		exceed equilibrium GDP

QUESTION 23

Prior to the Great Depression, the principal fiscal policy was a balanced budget.

	a	True
	b	False

QUESTION 24

Raising taxes as an element of discretionary fiscal policy is intended to reduce aggregate demand, but it can also reduce aggregate supply if

	a	the higher taxes lead workers to seek out a second job
	b	the higher taxes cause workers to work less
	c	the government purchases goods with the additional revenue
	d	the government uses the additional revenue to retire some of the federal debt
	e	the higher taxes cause people to save less

QUESTION 25

Supply-side economics emphasized government policies to

a		stimulate aggregate demand
b		increase minimum wage to improve labor productivity
c		stimulate real GDP by improving incentives to work
d		lower interest rates
e		increase tax revenues of government in order to increase government purchases

Answer 1

Q-21 :: ANSWER :: (D)

=>Explanation :

The Space Shuttle Program Is The Fiscal Program Of The Government And Has A Large Amount Of Money, Which Has The Larger Effect On, Countries Per Dollar, And also On Aggregate Demand Of Market. It Require Large Amount Of Money While Making Space Shuttle So It Biggest Effect Per Dollar, Aggregate Demand.

Q-22 :: ANSWER :: (E) Exceed Equilibrium GDP

=> Explanation ::

One Lesson Of The Great Depression Was That Potential GDP Could Exceed Equilibrium GDP. It Means It Shows Value Above The Equilibrium GDP. So For That Potential GDP Is Not Good Measure Of GDP Calculation.

Q-23 :: ANSWER ::FALSE

=> Explanation ::

  Prior to the Great Depression, the principal fiscal policy was Not a balanced budget But To Promote Full Employment In the Country And Price Stability So It Can Helps To Reduce The Great Depression.

Q-24 :: ANSWER :: (B) The higher taxes cause workers to Reduce work

=> Explanation ::

increasing taxes as an element of discretionary fiscal policy is reduce aggregate demand, but it can also reduce aggregate supply if There Is Higher Taxes Cause Workers To Work Less Which Reduce Their Income And Savings.

Q-25 :: ANSWER :: (C) Stimulate Real GDP By Improving Incentives to work

=>Explanation ::

Supply-side Economics Emphasized Government policies to Stimulate Real GDP By Improving Incentives To Work and It Leads To Increase In The Output Of The Country.

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