Question 1

Crowding in would occur if a

Accepted Answer

A) government increased public spending. 
B) government reduced public spending. 
C) government increased borrowing. 
D) Government increased regulation. 
A) government increased public spending. 
B) government reduced public spending. 
C) government increased borrowing. 
D) Government increased regulation.

Question 2

Raising thresholds at which people pay tax means

Accepted Answer

A) people pay more in indirect taxes. 
B) the level of tax paid by high earners increases. 
C) the level of earnings before anyone pays tax rises. 
D) the level of earning before anyone pays tax falls. 
A) people pay more in indirect taxes. 
B) the level of tax paid by high earners increases. 
C) the level of earnings before anyone pays tax rises. 
D) the level of earning before anyone pays tax falls.

Question 3

An example of deregulation is

Accepted Answer

A) allowing different bus companies to compete with each other in the same city. 
B) making sure health and safety is maintained. 
C) reducing competition to encourage economies of scale. 
D) protecting workers rights. 
A) allowing different bus companies to compete with each other in the same city. 
B) making sure health and safety is maintained. 
C) reducing competition to encourage economies of scale. 
D) protecting workers rights.

Question 4

What is the Laffer curve and how has it influenced government taxation policies?

Accepted Answer

The Laffer curve plots the relationship

Question 5

Policy makers who believe in the Laffer curve should

Accepted Answer

A) increase income tax rates for highest wage earners. 
B) increase income tax rates for the lowest wage earners. 
C) decrease income tax rates for the lowest wage earners. 
D) decrease income tax rates for the highest wage earners. 
A) increase income tax rates for highest wage earners. 
B) increase income tax rates for the lowest wage earners. 
C) decrease income tax rates for the lowest wage earners. 
D) decrease income tax rates for the highest wage earners.

Question 6

Privatization is when

Accepted Answer

A) the government deregulates markets. 
B) the government cuts back spending. 
C) there is a transfer of public ownership of assets to the private sector. 
D) All of the above. 
A) the government deregulates markets. 
B) the government cuts back spending. 
C) there is a transfer of public ownership of assets to the private sector. 
D) All of the above.

Question 7

Improving the flexibility of labour markets

Accepted Answer

A) can worsen the rights of employees. 
B) makes it easier to hire and fire labour. 
C) results in less ridged labour markets. 
D) All of the above. 
A) can worsen the rights of employees. 
B) makes it easier to hire and fire labour. 
C) results in less ridged labour markets. 
D) All of the above.

Question 8

Market orientated supply side policy makers believe all the following except that

Accepted Answer

A) higher tax rates increase the opportunity cost of leisure. 
B) taxes need to be cut, as they are a disincentive to work. 
C) welfare payments need to be cut, as they are a disincentive to work. 
D) labour markets need to be more flexible to encourage firms to take on more workers. 
A) higher tax rates increase the opportunity cost of leisure. 
B) taxes need to be cut, as they are a disincentive to work. 
C) welfare payments need to be cut, as they are a disincentive to work. 
D) labour markets need to be more flexible to encourage firms to take on more workers.

Question 9

The aggregate supply curve shifts to the right when

Accepted Answer

A) the labour force declines. 
B) technology improves. 
C) there is a substantial decline in the numbers attending university. 
D) there is a decrease in net immigration. 
A) the labour force declines. 
B) technology improves. 
C) there is a substantial decline in the numbers attending university. 
D) there is a decrease in net immigration.

Question 10

Table 1
  
-Refer to Table 1 above, which shows the tax levels in an economy.A person earning R12,000 pays income tax equal to

Accepted Answer

A) R0. 
B) R400. 
C) R2 000. 
D) R2 400. 
A) R0. 
B) R400. 
C) R2 000. 
D) R2 400.

Question 11

The more elastic that supply and demand are in any market, the more taxes in that market distorts behaviour.

Accepted Answer

A) True 
 B)False

Question 12

What leads to an outward shift in the supply curve?

Accepted Answer

Supply side policies are designed to inc

Question 13

The aggregate supply curve would shift to the right if a country ran saw advances in technology.

Accepted Answer

A) True 
 B)False

Question 14

While taxes distort market outcomes, welfare payments do not.

Accepted Answer

A) True 
 B)False

Question 15

Shifting the aggregate demand curve to the right can lead to sustained growth.

Accepted Answer

A) True 
 B)False

Question 16

If tax rates are increased then

Accepted Answer

A) the substitution effect is greater than the income effect. 
B) the income effect is greater than the substitution effect. 
C) there is only an income effect. 
D) there is only a substitution effect. 
A) the substitution effect is greater than the income effect. 
B) the income effect is greater than the substitution effect. 
C) there is only an income effect. 
D) there is only a substitution effect.

Question 17

Why do governments accept a target inflation rate of around 2 per cent?

Accepted Answer

Many economists would argue that a littl

Crowding in would occur if a

Raising thresholds at which people pay tax means

An example of deregulation is

What is the Laffer curve and how has it influenced government taxation policies?

Policy makers who believe in the Laffer curve should

Privatization is when

Improving the flexibility of labour markets

Market orientated supply side policy makers believe all the following except that

The aggregate supply curve shifts to the right when

Table 1 -Refer to Table 1 above, which shows the tax levels in an economy.A person earning R12,000 pays income tax equal to

The more elastic that supply and demand are in any market, the more taxes in that market distorts behaviour.

What leads to an outward shift in the supply curve?

The aggregate supply curve would shift to the right if a country ran saw advances in technology.

While taxes distort market outcomes, welfare payments do not.

Shifting the aggregate demand curve to the right can lead to sustained growth.

If tax rates are increased then

Why do governments accept a target inflation rate of around 2 per cent?

What Is Economics

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters

Exam 18: Supply Side Policies

Crowding in would occur if a

Raising thresholds at which people pay tax means

An example of deregulation is

What is the Laffer curve and how has it influenced government taxation policies?

Policy makers who believe in the Laffer curve should

Privatization is when

Improving the flexibility of labour markets

Market orientated supply side policy makers believe all the following except that

The aggregate supply curve shifts to the right when

Table 1 -Refer to Table 1 above, which shows the tax levels in an economy.A person earning R12,000 pays income tax equal to

The more elastic that supply and demand are in any market, the more taxes in that market distorts behaviour.

What leads to an outward shift in the supply curve?

The aggregate supply curve would shift to the right if a country ran saw advances in technology.

While taxes distort market outcomes, welfare payments do not.

Shifting the aggregate demand curve to the right can lead to sustained growth.

If tax rates are increased then

Why do governments accept a target inflation rate of around 2 per cent?

What Is Economics

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters