Macro - Macroeconomic policies PART 2

Question 1

True or False: The time lags between a change in supply-side policies and their effects on the macroeconomy tend to be longer than changes in monetary and fiscal policies

Answer 1

True

Question 2

True or False: Karl Marx is famous for advocating supply side measures for an economy.

Answer 2

false

Question 3

True or False: Other things remaining constant, a sharp rise in world oil prices has inflationary consequences for prices but deflationary effects on the level of real national output.

Answer 3

True

Question 4

All of the following are examples of government policies aimed at improving ‘supply side’ economic performance and increasing the trend rate of economic growth except

Answer 4

The introduction of a national minimum wage

Question 5

A ‘supply-side’ economist would support a policy of

Answer 5

Lower company taxes to encourage business investment

Question 6

Which one of the following would be a supply-side measure designed to improve the international competitiveness of domestic producers in world markets?

Answer 6

An increase in capital investment tax allowances

Question 7

Supply-side measures aiming to to reduce unemployment include

Answer 7

Reducing the marginal rate of income tax

Question 8

One drawback of supply side policies is

Answer 8

they have the potential to create environmental damage if unchecked

Question 9

Interventionist supply side economists would advocate

Answer 9

increasing grants and subsidies

Question 10

Free market supply side economists would advocate

Answer 10

increasing the privatisation programme