Question 1When aggregate supply exceeds aggregate demand:A. explosive inflations occur.B. the economy is in disequilibrium.C. planned saving will equal planned investment.D. inventories rise.Question 2Keyness analysis of the Great Depression led to which of the following recommendations regarding government policy?A. An annually balanced budgetB. A decrease in government spendingC. An increase in government spendingD. An increase in taxesQuestion 3Budget deficits are appropriate during:A. recessions but not inflations.B. inflations but not recessions.C. recessions and inflations.D. neither recessions nor inflations.Question 4Each of the following is an example of discretionary fiscal policy EXCEPT:A. public works spending.B. making the automatic stabilizers more effective.C. changes in tax rates.D. the unemployment insurance program.
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