Question: Hi please help with me a multiple choice problem in macroeconomics! The Keynesian Framework advocates the use of fiscal policy to eliminate recessionary or inflationary
Hi please help with me a multiple choice problem in macroeconomics!
- The Keynesian Framework advocates the use of fiscal policy to eliminate recessionary or inflationary gaps. Which of the following government actions is appropriate to eliminate a recessionary gap?
A. reducing government spending on goods and services
B. reducing government transfer payments to households
C. reducing taxes imposed on households
D. all of the above
2. The Keynesian Framework advocates the use of fiscal policy to eliminate recessionary or inflationary gaps. Which of the following government actions is appropriate to eliminate a recessionary gap?
A. reducing government spending on goods and services
b. reducing government transfer payments to households
c. reducing taxes imposed on households
D. all of the above
3. One of the drawbacks of fiscal policy in resolving a recessionary or inflation gap is that the process of changing the government budget is very lengthy and goes from the executive departments of government to Congress and Senate for review and deliberation to the President for signing into a law. This is referred to as the
A. recognition of lag policy
B. legislative lag policy
C. implementation of lag policy
D. all of the above
4. A.W Phillips who studied the Keynesian Framework and formulated the Phillips Curve that shows the short run trade-off between
A. GDP and lower unemployment
b. aggregate demand and aggregate supply
C. economic growth and inflation
d. unemployment and inflation
5. Fiscal or monetary policy that changes AD will cause a large change in real GDP and small change in the price level when it occurs at the
a. Neoclassical zone of short run AS
b. Intermediate zone of short run AS
c. Keynesian zone of short run AS
6. When the labor market in the macroeconomy is at full employment, the actual real GDP produced in the product market is
a. greater than potential real GDP
b. less than potential real GDP
c. equal to potential real GDP
d. any of the above is possible
7. The AD-AS model shows that a decline in consumer and business confidence in the economy will, other factors constant,
A. cause firms to lay off workers, which increases unemployment, which reduces real GDP, which causes a decline in AD
B. cause firms to reduce production, which causes a decline in AD, which reduces GDP and increases unemployment
C. cause a decline in AD, which causes firms to reduce production, which reduces real GDP and increases unemployment
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