Question 1

Changing the benefit system to encourage people to work is a supply side policy.

Accepted Answer

A) True 
 B)False

Question 2

Lower interest rates may encourage more investment and less saving.

Accepted Answer

A) True 
 B)False

Question 3

A budget surplus means that government spending is less than government revenue

Accepted Answer

A) True 
 B)False

Question 4

Fiscal policy includes the use of interest rates to control the economy.

Accepted Answer

A) True 
 B)False

Question 5

When the economy is in a recession the budget position automatically worsens.

Accepted Answer

A) True 
 B)False

Question 6

Quantitative easing is part of monetary policy

Accepted Answer

A) True 
 B)False

Question 7

Changing the tax system to encourage businesses to innovate is a supply side policy.

Accepted Answer

A) True 
 B)False  True

Question 8

A budget deficit is often a sign of an expansionist fiscal policy.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true about the multiplier?

Accepted Answer

A)   Its measures the relationship between an increase in spending and an increase in inflation
B)   Its measures the relationship between an increase in spending and an increase in imports
C)   The size of the multiplier will be bigger if the marginal propensity to consume is bigger
D)   The size of the multiplier will be bigger if the marginal propensity to import is biggerE) None of the above
F) A) and D) C

Question 10

Which of the following would not shift aggregate supply?

Accepted Answer

A)   Training.
B)   Investment.
C)   Aggregate demand.
D)   An increase in the working population.E) B) and C)
F) A) and D) C

Question 11

To increase aggregate demand the Government could increase tax rates.

Accepted Answer

A) True 
 B)False

Question 12

Monetary policy involves controlling the money supply to influence the economy.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is NOT an example of fiscal policy?

Accepted Answer

A)   Cutting interest rates
B)   Cutting income tax.
C)   Cutting government spending
D)   Cutting fuel taxes in the economy.E) A) and B)
F) None of the above

Question 14

In a progressive tax system the average rate of tax falls with more income

Accepted Answer

A) True 
 B)False

Question 15

A budget deficit will increase the government debt

Accepted Answer

A) True 
 B)False

Question 16

To increase aggregate demand the Bank of England could cut interest rates.

Accepted Answer

A) True 
 B)False

Exam 12: Government Macroeconomic Policy and Business

Changing the benefit system to encourage people to work is a supply side policy.

Correct Answer
verified

Lower interest rates may encourage more investment and less saving.

Correct Answer
verified

A budget surplus means that government spending is less than government revenue

Correct Answer
verified

Fiscal policy includes the use of interest rates to control the economy.

Correct Answer
verified

When the economy is in a recession the budget position automatically worsens.

Correct Answer
verified

Quantitative easing is part of monetary policy

Correct Answer
verified

Changing the tax system to encourage businesses to innovate is a supply side policy.

Correct Answer
verified
True

A budget deficit is often a sign of an expansionist fiscal policy.

Correct Answer
verified

Which of the following is true about the multiplier?

Correct Answer
verified
C

Which of the following would not shift aggregate supply?

Correct Answer
verified
C

To increase aggregate demand the Government could increase tax rates.

Correct Answer
verified

Monetary policy involves controlling the money supply to influence the economy.

Correct Answer
verified

Which of the following is NOT an example of fiscal policy?

Correct Answer
verified

In a progressive tax system the average rate of tax falls with more income

Correct Answer
verified

A budget deficit will increase the government debt

Correct Answer
verified

To increase aggregate demand the Bank of England could cut interest rates.

Correct Answer
verified

Exam 12: Government Macroeconomic Policy and Business

Changing the benefit system to encourage people to work is a supply side policy.

Correct AnswerverifiedShow Answer

Lower interest rates may encourage more investment and less saving.

Correct AnswerverifiedShow Answer

A budget surplus means that government spending is less than government revenue

Correct AnswerverifiedShow Answer

Fiscal policy includes the use of interest rates to control the economy.

Correct AnswerverifiedShow Answer

When the economy is in a recession the budget position automatically worsens.

Correct AnswerverifiedShow Answer

Quantitative easing is part of monetary policy

Correct AnswerverifiedShow Answer

Changing the tax system to encourage businesses to innovate is a supply side policy.

Correct AnswerverifiedTrue

A budget deficit is often a sign of an expansionist fiscal policy.

Correct AnswerverifiedShow Answer

Which of the following is true about the multiplier?

Correct AnswerverifiedC

Which of the following would not shift aggregate supply?

Correct AnswerverifiedC

To increase aggregate demand the Government could increase tax rates.

Correct AnswerverifiedShow Answer

Monetary policy involves controlling the money supply to influence the economy.

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of fiscal policy?

Correct AnswerverifiedShow Answer

In a progressive tax system the average rate of tax falls with more income

Correct AnswerverifiedShow Answer

A budget deficit will increase the government debt

Correct AnswerverifiedShow Answer

To increase aggregate demand the Bank of England could cut interest rates.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
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Correct Answer
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C

Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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