Social Studies 30-1 Economic Review

The writer of the above excerpt expresses beliefs that are most consistent with those of

• Karl Marx

• Adam Smith

• John Stuart Mill

• John Maynard Keynes

Which of the following actions represents a government fiscal policy?

• Minting a new coin

• Regulating the stock market

• Increasing the minimum wage

• Decreasing the income tax rate

Universal social programs that redistribute wealth within society reflect values associated with

• conservatism

• individualism

• egalitarianism

• classical liberalism

A proponent of this view would most likely support

• an increase in pension and other social assistance benefits

• the nationalization of industries as a means of job creation

• a decrease in taxation rates for individuals and corporations

• the discontinuation of gambling revenues to support charities

Given the cynical tone of the statement, which of the following points of view would the writer support?

• Despite its shortcomings, the welfare state is still the most viable economic system because it attempts to achieve collective goals

• In the welfare state, the lack of incentives and material rewards for hard work discourages self-sufficiency

• Hard work is the best policy because everyone in a welfare state is at least provided with basic subsistence

• The same income disparity that exists among individuals in a market economy also exists in a welfare state

A proponent of a market economy would support the sentiment expressed in this statement. This support would be based on the belief that economic

• freedom limits flexibility in achieving production goals set by government

• competition results in the availability of a wide variety of goods and services

• insecurity is necessary to produce a work force that exhibits self-reliance and initiative

• choices made by individuals will lead inevitably to an increase in the standard of living for all

Assuming that the theoretical relationships in the graph are correct, government spending during times of increased economic growth should be low because

• taxation revenues are difficult to raise

• demands for public services are high

• recessionary pressures are much less

• unemployment rates are increasing

According to the theory underlying the graph, why should the rate of taxation be high during periods of high economic growth?

• Because such a policy encourages greater consumer spending

• Because increased taxation levels help to stop rising unemployment

• Because increased government spending requires increased taxation levels

• Because such a policy allows government to set aside revenues for future economic downturns

The demise of capitalism, as Karl Marx predicted, failed to materialize in industrialized England partially due to the

• legislation of labour laws and legalization of trade unions

• abolition of left-wing political parties and rise of corporations

• legalization of monopolies and dependence on private charities

• nationalization of industries and spread of democratic socialism

Economist John Maynard Keynes greatly influenced the evolution of economic liberalism by advocating for

• labourers to use collective action to bring about the nationalization of the productive forces of the country and thus ensure sustainable economic growth

• consumers to be informed as to the environmental and labour practices of businesses and make ethical decisions when purchasing goods and services

• corporations to work cooperatively rather than competitively to ensure that the prices for goods and services could be set by their collective decisions

• governments to use fiscal and monetary policies to more closely regulate the economy and thus prevent excessive fluctuations in the economic cycle