(A) interest rates.
(B) the level of prices.
(C) the level of aggregate supply in the economy
(D) the level of aggregate demand for goods and services.
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The practice of using fiscal and monetary policy to stabilise the economy is known as?
(A) fine tuning of demand
(B) monetarism
(C) laissez faire economics
(D) supply side economics
The practice of using fiscal and monetary policy to stabilise the economy is known as?
(A) fine tuning of demand
(B) monetarism
(C) laissez faire economics
(D) supply side economics
Keynes believed falling wages were not a solution to persistent unemployment because?
(A) falling wages demoralised workers.
(B) this would reduce the purchasing power of labourers as consumers.This in turn would bleaken firms’ prospects of selling more goods,hence inducing them to cut their investment (and hence labour) demand.
(C) the unemployment was caused by frictional and structural factors.
(D) wages would fall more than required to clear the labour market.
Macroeconomic theory that emphasised the theories of Keynes and deemphasised the Classical theory developed as the result of the failure of?
(A) economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s.
(B) fine tuning during the 1960s.
(C) the economy to grow at a rapid rate during the 1950s.
(D) the Classical model to explain the prolonged existence of high unemployment during the Great Depression.
A group of modern economists who believe that price and wage rigidities do not provide the only rationale for macroeconomic policy activism are called?
(A) New-Keynesians.
(B) Keynesians.
(C) Monetarists.
(D) The Classical school.
Macroeconomics is the branch of economics that deals with?
(A) the economy as a whole.
(B) imperfectly competitive markets.
(C) only the long run adjustments to equilibrium in the economy.
(D) the functioning of individual industries and the behaviour of individual
decision-making units – business firms and households.
A cut in the tax rate designed to reduce the cost of capital and hence encourage business investment is an example of?
(A) expansionary demand-side policy.
(B) contractionary demand-side policy.
(C) expansionary supply-side policy.
(D) contractionary supply-side policy.