AACSB Analytic BLOOMS TAXONOMY Comprehension Difficulty Medium Learning

Aacsb analytic blooms taxonomy comprehension

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AACSB: AnalyticBLOOM'S TAXONOMY: ComprehensionDifficulty: MediumLearning Objective: 27-5Topic: Fiscal Policy27-145
Chapter 27 - The Aggregate Demand/Aggregate Supply Model185. Refer to the graph above. An expansionary fiscal policy would be most appropriate whenthe economy is at point: A. E.B. B.C. C.D.D.An expansionary fiscal policy is most appropriate when an economy is experiencing a recessionary gap, which is true only at points A and D.AACSB: AnalyticBLOOM'S TAXONOMY: ComprehensionDifficulty: MediumLearning Objective: 27-5Topic: Fiscal Policy186. Refer to the graph above. A policy that cuts government spending would be most appropriate when the economy is at point: A. A.B.B.C. C.D. D.A contractionary fiscal policy is most appropriate when an economy is experiencing an inflationary gap, which is only true at points B and E.AACSB: AnalyticBLOOM'S TAXONOMY: ComprehensionDifficulty: MediumLearning Objective: 27-5Topic: Fiscal Policy27-146
Chapter 27 - The Aggregate Demand/Aggregate Supply Model187. Refer to the graph above. No changes in fiscal policy are advisable when the economy is at point: A. A.B. B.C.C.D. D.When output equals potential output (which is the case at point B), an economy is in long-run equilibrium, so no change in fiscal policy is desirable.AACSB: AnalyticBLOOM'S TAXONOMY: ComprehensionDifficulty: MediumLearning Objective: 27-5Topic: Fiscal Policy188. Suppose the target rate of unemployment is 5 percent but the actual rate of unemployment is 4 percent. Given this information, which of the following policies is most appropriate according to the AS/AD model? A. A tax cut.B. An increase in government spending.C.A tax increase.D. No change in taxes or government spending.Because the unemployment rate is beneath the target rate, output is most likely above potential, so a contractionary policy is most appropriate.AACSB: AnalyticBLOOM'S TAXONOMY: AnalysisDifficulty: MediumLearning Objective: 27-5Topic: Fiscal Policy27-147
Chapter 27 - The Aggregate Demand/Aggregate Supply Model189. Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model? A.An increase in government spending.B. An increase in taxes.C. A reduction in government spending.D. No change in taxes or government spending.Any decline in consumer spending will reduce aggregate demand and cause output to fall beneath potential output in the short run. Given this, an expansionary fiscal policy would be most appropriate.AACSB: AnalyticBLOOM'S TAXONOMY: AnalysisDifficulty: MediumLearning Objective: 27-5Topic: Fiscal Policy190. Under what circumstances is it most clear the government should pursue neither fiscal nor monetary policy?

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