MCQs 12(1) - ECON7020 Practising MCQs 12 1 Economists who...

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MCQs 12(1)

1 .   Economists who view the economy as inherently unstable generally argue that :
A ) stabilization policy is too dangerous to be used .
B ) the economy should be stimulated when it is depressed and slowed when it is overheated .
C ) the economy should be slowed when it is depressed and stimulated when it is overheated .
D ) monetary and fiscal policies should follow rigid rules of constant growth .
Answer:  B )   the economy should be stimulated when it is depressed and slowed when it is overheated .
2 .   Economists who view the economy as naturally stable often argue that :
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3 .   Passive economic policy seeks to :
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4 .   Arguments in favor of active economic policy include all of the following except :
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5 .   The time between a shock to the economy and the policy action responding to that shock is called the :
A ) automatic stabilizer .
B ) time inconsistency of policy .
C ) inside lag .
D ) outside lag .
6 .   All of the following could be considered automatic stabilizers except :
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7 .   What are two types of tools that economists use to forecast future economic developments ?
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8 .   Policy is conducted by rule if policymakers :
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9 .   Policy is conducted by discretion if policymakers :
A ) announce in advance how policy will respond to various situations and commit themselves to following through on this announcement .
B ) are free to size up the situation case by case and choose whatever policy seems appropriate at the time .
C ) announce and maintain a constant growth rate of the money supply .
D ) announce and achieve a balanced government budget .
Answer:  B )   are free to size up the situation case by case and choose whatever policy seems appropriate at the time .
10 .   A time - inconsistency problem in macroeconomic policy can occur when the policymaker :
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Economics: Private and Public Choice
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Chapter 15 / Exercise 1
Economics: Private and Public Choice
Gwartney/Stroup/Sobel/Macpherson
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Page 1 ECON7020 Practising MCQs 121. Economists who view the economy as inherently unstable generally argue that: A) stabilization policy is too dangerous to be used. B) the economy should be stimulated when it is depressed and slowed when it is overheated. C) the economy should be slowed when it is depressed and stimulated when it is overheated. D) monetary and fiscal policies should follow rigid rules of constant growth.
2. Economists who view the economy as naturally stable often argue that:
3. Passive economic policy seeks to:
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Economics: Private and Public Choice
The document you are viewing contains questions related to this textbook.
Chapter 15 / Exercise 1
Economics: Private and Public Choice
Gwartney/Stroup/Sobel/Macpherson
Expert Verified

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