Which is the correct definition of "inflation"?

the continuous rise in the average level of prices

Which is NOT a problem with Fiscal Policy?

Expansionary fiscal policy causes unemployment

Fiscal policy includes what?

Changing tax and government spending levels

The "circular flow diagram" shows the interaction between which three parties in an economy?

Households, Producers & Government

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Macroeconomic Government Policy

18 termsStudBud Administration598 plays

Overview of fiscal and monetary policy

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Questions 18

Answers

1
Which is NOT part of Aggregate Demand?
Government spending
Production
Investment
Consumption
2
Which is NOT a macroeconomic goal?
Economic growth
No inflation
Reduce income equality
High & stable employment
3
The income someone who invests in a business, is called what in the circular flow theory?
Wages
Rent
Interest
Profits
4
Which is the correct definition of "inflation"?
the continuous rise in the average level of prices
the continuous rise in prices
the rise in the level of some prices
the rise in the average level of prices
5
If your currency gets weaker compared to overseas currencies, your imports will what?
Become easier and decrease
Become harder and increase
Become easier and increase
Become harder and decrease
6
Increasing the money supply by the Government is called what?
Inflation
Quantitative easing
Exchange rate policy
Monetary policy
7
Which is NOT a problem with Fiscal Policy?
It is slow and clumsy (cumbersome) to use
Might prevent private producers from entering the market
Increased taxes reduces reasons for people to work hard
Expansionary fiscal policy causes unemployment
8
Which is NOT a role for the government in a mixed economy?
Local government
Public Companies
Public Corporations
Agencies like health or education
9
The study of how a national economy works is called what?
Government economics
Microeconomics
Macroeconomics
Freakanomics
10
Which is NOT a form or Capital expenditure?
Local infrastructure investment
Building schools
Investment in computers for the public sector
Teacher wages
11
Which is NOT a supply-side policy?
Selective tas incentives
Decreased interest rates
Labour marker reforms
Selective subsidies
12
Can Microeconomic goals conflict with each other?
Yes
Yes but only rarely
No - they don't
13
If your currency gets stronger compared to overseas currencies, your exports will what?
Become easier and increase
Become harder and increase
Become easier and decrease
Become harder and decrease
14
Demand-side policies do NOT use
Improving education
Total public expenditure
Interest rates
The level of taxation
15
Which type of government spending includes the wages of public sector workers?
Current expenditure
Capital expenditure
Capital investment
Public expenditure
16
Fiscal policy includes what?
Reducing union negotiating power
Changing interest rates
Changing tax and government spending levels
Altering regulations that producers must follow
17
The "circular flow diagram" shows the interaction between which three parties in an economy?
Households, Producers & the Central bank
Households, Producers, Importers and Exporters
Households, Government, Importers and Exporters
Households, Producers & Government
18
If the currency in your country "appreciates" it can be said to what?
Gets stronger
It ceases to exist
Nothing happens
Gets weaker

Macroeconomic Government Policy Flashcards | StudBud