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Effect of expansionary policy on the economy

Assignment Help Macroeconomics
Reference no: EM132795444

Question 1. Determine which statement below is true of ONLY contractionary policy.

a. This includes monetary and fiscal policy

b. Too much of this can lead only to inflation

c. This can help reduce unsustainable levels of production

d. Lowering interest rates are an example of this

Question 2. Select the statement below that is FALSE regarding labor force participation by gender.

a. GDP indirectly accounts for labor force participation.

b. The employment of women in living wage occupations leads to lower birth rates.

c. The employment of women in living wage occupations raises the standard of living for families.

d. Labor force participation rates are not a good indicator of a country's economic health.

Question 3. Which statement below describes the effect of expansionary policy on the economy?

a. It decreases consumer willingness to purchase.

b. If AD increases past full employment, prices will rise and return us to equilibrium.

c. AD shifts to the left.

d. It decreases the money supply.

Question 4. Determine which statement below regarding international trade is FALSE.

a. A recession in one country can have a negative effect on AD in another country.

b. An increase in imports will cause a rightward shift in AD.

c. If the dollar is weak, people in other countries will purchase more U.S. products.

d. Trade surplus occurs when exports exceed imports.

Question 5. Which statement below regarding sustainable economic growth is FALSE?

a. In a recession, public policy could help an economy return to full employment.

b. Producing or consuming more does not always equate to long term economic growth.

c. A recession is a sustainable level of production.

d. When equilibrium is to the right of the LRAS, that is a sustainable level of production.

Reference no: EM132795444

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