Question

Question 61 pts

Which of the following is a fiscal policy?

The government setting a minimum wage for the production sector but not itself.

The government changing taxes or government spending.

The government changing the money supply and therefore interest rates.

All of the above.

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Question 71 pts

In the Classical model, a rise in AD pushing us above FE is likely to cause:

a decrease in AS as wages and input prices adjust to higher output prices.

a further increase in AD as rises in real income cause more spending.

a rise in AS as firms make more output do to higher demand.

an increase in FE as the economy makes more output.

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Question 81 pts

The equation of exchange shows:

the relationship between money spent and money received on national output.

the relationship between unemployment and inflation.

the relationship between equilibrium and full employment.

the relationship between savings and investment.

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Question 91 pts

Early in the Great Depression Classical economics blamed the worsening economy on:

consumption not keeping up with production because of income inequality.

an inadequate growth of the money supply.

interest rates being too low to support full employment.

none of the above

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Question 101 pts

The equation of exchange shows that the money spent equals the money received for goods and services.

True

False

Answer 1

61. )

Fiscal policy refers to the government policy related to the tax and expenditure:

Hence right answer is “the government changing taxes or government spending”

71)

Rise in aggregate demand only leads to the inflation if economy already operates the FE.

Right answer is “a further increase in AD as rises in real income cause more spending”

81)

right answer is " the relationship between money spent and money received on national output.

91)

Right answer is None of the above.

government intervention worsen the depression and led to its prolongation.

101)

True statement.