Chapter 15 Quiz

​A severe economic downturn results in ______.

• ​rising prices

• ​increased aggregate demand

• ​falling prices

• ​decreased government regulation

​How do economists use aggregate supply and demand curves?

• ​to predict the effects of economic policy on consumers

• to analyze how economic policies may affect growth and stability

• to show economic trends over time​

• ​to analyze the effects of past economic policies on consumers

​The equilibrium price is determined by ____.

• ​the government

• ​tax rates

• ​big corporations

• ​the market

​The progressive income tax is an example of _____.

• ​an entitlement

• ​priming the pump

• ​an automatic stabilizer

• ​government dependency

​Policies that make production more efficient are favored by ______.

• ​supply-siders

• ​demand-siders

• both supply-siders & demand-siders

• neither supply-siders nor demand-siders

Fiscal policy may involve ____. ​

• estimating the GDP​

• ​regulating labor unions

• ​recognizing an economic problem

• ​taxing corporations

​Supply-side policies aim to _____.

• strengthen the government’s role in the economy

• strengthen the economy by increasing taxes​

• ​reduce the government’s role in the economy

• increase regulation of corporations​

According to Keynesian economics, which sector of the economy could offset a decline in business spending? ​

• ​consumer

• ​business

• ​government

• ​foreign

​Which of the following describes the idea of the Laffer Curve as it is expressed mathematically?

• The ratios show the relationship between federal income tax rates and revenue.

• ​The ratios show the relationship between supply-side and demand-side policies.

• ​The ratios show the relationship between the personal income tax and consumer spending.

• ​The ratios show the relationship between increased government regulation and corporate profits.

​How do production costs affect aggregate supply?

• Aggregate supply increases when production costs decrease.

• ​Aggregate supply decreases when production costs decrease.

• ​Aggregate supply increases when production costs increase.

• ​Aggregate supply decreases when production costs remain the same.