Which of the following favors government policies to stimulate the economy by creating incentives for individuals and businesses to increase their productive efforts?
a. supply-side economics.
b. Keynesian economics.
c. monetarist economics.
d. Marxian economics.
QUESTION 2Each point on the Phillips curve represents a combination of the:
a. prime rate and the savings rate.
b. savings rate and the unemployment rate.
c. inflation rate and the unemployment rate.
d. consumption rate and the inflation rate.
QUESTION 3Which one of the following groups benefits from inflation?
a. Borrowers.
b. Savers.
c. Landlords.
d. Lenders.
QUESTION 4An advocate of supply-side fiscal policy would advocate which of the following?
a. Subsidies to produce technological advances.
b. Reduction in regulation.
c. Reduction in resource prices.
d. Reduction in taxes.
e. All of these.
QUESTION 5The Phillips curve:
a. is downward sloping.
b. is upward sloping.
c. shows there is a tradeoff between unemployment and the inflation rate.
d. shows there is a tradeoff between population and the inflation rate.
QUESTION 6Those hurt by inflation include:
a. labor unions with COLA clauses.
b. borrowers.
c. savers.
d. owners of real estate.
e. owners of precious metals, antiques, and works of art.
QUESTION 7According to supply-side fiscal policy, reducing tax rates on wages and profits will:
a. create demand-pull inflation.
b. lower the price level but may trigger a recession.
c. result in stagflation.
d. reduce both unemployment and inflation.
QUESTION 8A Phillips curve shows the relationship between the inflation rate and the:
a. wage rate.
b. unemployment rate.
c. real GDP growth rate.
d. population growth rate.
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