Labor Force Test

Categorize each characteristic under the correct type of policy: Monetary Policy or Fiscal Policy

Groups:

(a) Monetary Policy

,

(b) Fiscal Policy

• Can change Income Taxes

• Has 4 Tools to regulate the economy

• Tools are used to change the money supply

• Run by the Federal Government (Congress and the President)

• Can Chnage Regulations on Production- Which causes AS to shift

• Tools can cause ONLY the AD curve to shift

• Can Change Government Spending which causes AD to shift

• Controled by the Federal Reserve, which is the Central Bank of the US

Catergorize each type of the following specific monetary and fiscal policy actions as increaseing AD, decreasing AD or Increase AS.

Groups:

(a) Increasing AD

,

(b) Decreasing AD

,

(c) Increasing AS

• Increase Government Spending

• Increase Taxes

• Decrease Regulations on Production

• Decrease Government Spending

• Decrease Taxes on Production

• Increase the Money Supply

• Decrease Taxes

• Decrease the Money Supply

Match each specific type of policy action to the proper expansionary or contractionary policy.

• Increase Taxes

  Decrease Gov't Spending

• Contractionary Fiscal Poplicy

• Increase the Money Supply

• Expansionary Fiscal Policy

• Decrease Taxes

  Increase Gov't Spending

• Contractionary Monetary Policy

• Lower Taxes & Regulations on Production

• Supply-Sind Fiscal Policy

• Decrease the Money Supply

• Expansionary Monetary Policy

Make a recording identifying if the following statement is True or False AND explaining your response:

Statement- Monetary Policy is best used to solve Stagflation while Supply-Side Fiscal Policy should NEVER be use to attempt to solve Stagflation.

1. Identify the correct answer to each of the prompts given based on this scenario:

2. The Real GDP Growth Rate is 6.4%; Unemployment is at 4.2%; & the Rate of Inflation is now at 3.7%.

1. Economic Inefficiency:​ (a)  

2. Specific Fiscal Policy Action that should be taken: ​ (b)  

3. Specific Monetary Policy Action that should be taken:​ (c)  

• Recessionary Gap
• Stagflation
• Increase government spending
• Decrease the money supply
• Inflationary Gap
• Decrease taxes on production
• Increase the money supply
• Decrease government spending

1. Identify the correct answer to each of the prompts given based on this image shown:

1. Economic Inefficiency:​ ​ (a)  

2. Specific Fiscal Policy Action that should be taken: ​​ (b)  

3. Specific Monetary Policy Action that should be taken: ​ (c)  

4. ​

• Stagflation
• Decrease regulations on production
• No action should be taken
• Increase taxes
• Decrease the money supply
• Recessionary Gap
• Inflationary Gap

Slides 14, 15 and 16 are all related to the same scenario.

Based on the scenario below, which curve (AD or AS) will shift AND in which direction (Left or Right) because of the specific action taken.

Scenario: Everything else remaining constant, the economy is going through a significant economic slowdown but with significant inflation as well. The president and congress act quickly to decrease regulations and taxes on production.

• AD shifts Left

• AS shifts Right

• AD Shifts Right

• AS shift Left

Slides 14, 15 and 16 are all related to the same scenario.

Based on the scenario below, Identify which of the AD/AS models provided shows the proper shift (which match your answer on slide 15).

Scenario: Everything else remaining constant, the economy is going through a significant economic slowdown but with significant inflation as well. The president and congress act quickly to decrease regulations and taxes on production.

• Graph 1

• Graph 2

• Graph 3

Slides 14, 15 and 16 are all related to the same scenario.

Based on the scenario below, Identify the change that will occur in PRICE LEVEL, REAL GDP & UNEMPLOYMENT based on your responses from slides 14 and 15.

Scenario: Everything else remaining constant, the economy is going through a significant economic slowdown but with significant inflation as well. The president and congress act quickly to decrease regulations and taxes on production.

• Price Level Increases;

  Real GDP Decreases;

  Unemployment Increases

• Price Level Increases;

  Real GDP Increases;

  Unemployment Decreases

• Price Level Decreases;

  Real GDP Increases;

  Unemployment Decreases

• Price Level Decreases;

  Real GDP Decreases;

  Unemployment Increases

What does the Labor Force include according to the Bureau of Labor Statistics (BLS)?

• Only military people who are employed

• All nonmilitary people who are employed or unemployed

• Only people who are currently working for pay

• Only people who are unemployed and looking for work