[11] If an economy were to pursue a policy of maintaining full employment, it would likely...
[11] If an economy were to pursue a policy of maintaining full employment, it would likely have to forgo:
A) price stability.
B) full production.
C) economic growth.
D) maximum current output.
[11A] When the inflation rate goes up, the purchasing power of money:
A) increases.
B) decreases.
C) remains unchanged.
D) remains unchanged at first and then increases.
[11B] An increase in productivity occurs when:
A) output per worker increases.
B) a nation's rate of inflation falls.
C) money GDP increases at the same time that real GDP decreases.
D) a nation's GDP goes up as a result of an increase in the size of its labor force.
[11C] When injections into the spending stream are greater than leakages, the level of economic activity will:
A) increase.
B) decrease.
C) increase and then decrease.
D) remain unchanged.
[11D] If the economy were slipping into a recession, the preferred fiscal and monetary policies would lead to:
A) an increase in taxes and a decrease in the interest rate.
B) a decrease in transfer payments and an increase in the interest rate.
C) an increase in transfer payments and a decrease in the interest rate.
D) an increase in government purchases and an increase in the interest rate.
[11E] Monetary policy involves all of the following, EXCEPT:
A) interest rates.
B) the level of taxes.
C) the money supply.
D) the amount of loans.
[11F] The appropriate corrective policy for an economy experiencing high rates of both unemployment and inflation is:
A) a balanced budget.
B) a deficit budget.
C) a surplus budget.
D) not clear.
[11G] Which of the following statements about public goods is FALSE?
A) A person must pay to use a public good.
B) A lighthouse is an example of a public good.
C) No one can be excluded from using a public good.
D) Public goods are provided for all members of society.
Homework Answers
11. Option A. At full employment inflation is expected to increase
11A. Option B. As more number of currency needs to be spent
11B. Option A. When productivity increases
11.C. Option A
11 D. Option C.
11. E. Option B. As it is a tool of fiscal policy
11. F. Option C. As spending needs to be increased
11.G. Option D. As it cannot be provided for all
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[11] If an economy were to pursue a policy of maintaining full
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