Question

1. Which of the following factors did not contribute to Canada’s period of stagflation in the 1970’s?

1. Increases in global oil prices
2. Devaluation of the Canadian dollar
3. Higher wages for Canadian labour
4. Government deregulation in the energy industry

2. Which of the following fiscal policy stabilizers is automatic?

1. An increase in education spending to help with textbook shortage
2. A decrease in property taxes for seniors
3. Employment insurance premiums
4. All are examples of automatic stabilizers

3. Which of the following is not a lag associated with discretionary fiscal policy?B

1. Recognition lag
2. Political lag
3. Decision lag
4. Implementation lag

4. Which of the following statements would a proponent of supply-side economics agree with?

1. Consumer spending is the factor that drives a country’s economy
2. It is possible to simultaneously improve both inflation and unemployment
3. It is impossible to simultaneously improve both inflation and unemployment
4. An increase in aggregate supply will always lead to an increase in the price level

1. Which of the following factors did not contribute to Canada’s period of stagflation in the 1970’s?

1. Increases in global oil prices
2. Devaluation of the Canadian dollar
3. Higher wages for Canadian labour
4. Government deregulation in the energy industry

2. Which of the following fiscal policy stabilizers is automatic?

1. An increase in education spending to help with textbook shortage
2. A decrease in property taxes for seniors
3. Employment insurance premiums
4. All are examples of automatic stabilizers

3. Which of the following is not a lag associated with discretionary fiscal policy?B

1. Recognition lag
2. Political lag
3. Decision lag
4. Implementation lag

4. Which of the following statements would a proponent of supply-side economics agree with?

1. Consumer spending is the factor that drives a country’s economy
2. It is possible to simultaneously improve both inflation and unemployment
3. It is impossible to simultaneously improve both inflation and unemployment
4. An increase in aggregate supply will always lead to an increase in the price level

Answer 1

d. Government deregulation in the energy industry
During 1974-85, Canada regulated the industry through a complex system reducing incentives for efficient distribution of fuel by private participation

d. All are examples of automatic stabilizers
They all act countercyclically to the business cycle

b. Political lag
Recognition lag is relaizing the issue, decision lag is in handling the problem it and implementation lag is in acting on it

b. It is possible to simultaneously improve both inflation and unemployment
According to this, by lowering taxes and regulation, productivity can be increased that will decrease inflation pressures while increasing employment