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WorksheetsPearson 19 supply side
Total questions: 30
Worksheet time: 22mins
Name
Class
Date
1.
Advocates of supply-side economics argue that spending by the federal government _______.
a)
helps stimulates economic growth
b)
has no effect on economic growth
c)
slows economic growth
d)
can crash the economy completely
2.
Supply-siders generally favor _______.
a)
tax increases
b)
decreases in demand
c)
deregulation
d)
government intervention
3.
Which characteristic of money do precious stones not have?
a)
uniformity
b)
acceptable
c)
limited supply
d)
durability
4.
When the government spends more in a year than it brings in they run a
a)
deficit
b)
debt
c)
surplus
d)
default
5.
Laissez-faire economics holds which of the following to be true?
a)
The government should not take an active role in the economy.
b)
The government should do everything possible to reduce unemployment.
c)
The government should lower interest rates during a recession.
d)
The government should actively intervene in the economy.
6.
Liberalisation implies
a)
greater role of public sector
b)
reduction in govt. control over the private sector
c)
free economy with no controls
d)
none of these
7.
Which one of the following is NOT a supply side policy?
a)
the government increasing competition in all industries
b)
the government reducing import controls
c)
the government investing in training and education
d)
the government privatising national industries
8.
This economic model encourages lowering taxes on the wealthy and discourages the use of monetary policies to affect the economy.
a)
Supply-Side
b)
Demand-Side
c)
Voodoo Economics
d)
Keynesian
9.
the origin of supply side economics is
a)
keynesian economics
b)
monetarist economics
c)
neo classical economists
d)
post marxist reform economists
10.
which is not a form of market based supply side policy
a)
allowing in more foreign banks
b)
making labour costs cheaper
c)
offering incentives to encourage productivity
d)
spending less government money and not relying on a deficit
11.
which is not a form of competition based supply side policy
a)
free trade
b)
trade protection
c)
privatisation
d)
deregulation
12.
which of the following would achieve greater supply side policy efficiency
a)
making job security more secure
b)
making it easier to switch jobs
c)
allowing more casual employment
d)
increasing the minimum wage
13.
a problem with supply side policy is
a)
they cause external imbalance
b)
they take a long time to implement
c)
they interfere with monetary policy
d)
they cause a budget deficit
14.
interventionist supply side policy is about
a)
keynesian economic thinking
b)
shifting the SAS curve
c)
investing in capital - human and infrastructure
d)
allowing the market to run the economy
15.
the main argument behind supply side policy of free trade promotion is the
a)
the laffer curve
b)
diseconomies of scale
c)
loss of direct foreign investment
d)
loss of inefficient domestic industry in short run
16.
a major problem of supply side policies in less developed economies is
a)
it cause inflation
b)
it focusses on expensive long term projects that cause major government debt
c)
it only helps foreigners
d)
all of these options
17.
a supply side policy that could reduce unemployment would be
a)
TAFE vocational education subsidies
b)
a budget deficit
c)
decreased cash rate
d)
stronger unions
18.
some economists argue the reduction of a minimum wage and lower welfare will help reduce unemployment
a)
the cheaper wage rate will means more people will be employed
b)
it provides opportunities for low skilled workers to get a job
c)
the low income means people would have to work to survive
d)
all of these responses
19.
while industrial reform will boost economic growth it will likely
a)
increase the inflation rate
b)
incraese the cyclical unemployment
c)
it will have little effect on structural unemployment
d)
reduce job security and worker standard of living
20.
a supply side policy approach in theory has the advantage of achieving all the macroeconomic objectives
a)
true
b)
false
21.
which supply side policy was largely to blame for the GFC
a)
free trade
b)
banking sector deregulation
c)
lowering minimum wage
d)
trade protection
22.
how is fiscal policy a supply side policy
a)
lower marginal tax rates
b)
raise marginal tax rates
c)
increase indirect tax rates
d)
introduce ad valorem taxes
23.
supply side economists argue that unemployment exists because
a)
wages are too low
b)
wages are set too high
c)
skilled labours is in short supply
d)
none of these options
24.
wages according to Keynesian economic thinking are
a)
downwardly sticky
b)
influenced by a ratchet effect
c)
prevented from falling because of government awards
d)
all of these options
25.
successful supply side policies will boost
a)
government debt, budget surplus , jobs and deflation
b)
jobs, exports, welfare, price stability and growth
c)
sustainable economic growth and reduce the budget surplus
d)
none of these options
26.
the rational behind the free trade push for supply side ecnomics is
a)
all of these options
b)
specialisation
c)
economies of scale
d)
comparative advantage
27.
the problem of supply side economics is that
a)
it must be passed through parliament
b)
the RBA has a amjor say on what can be implemented
c)
it is infliuneced by the tital money supply
d)
it can be complicated by external factors
28.
a)
microeconomic reform
b)
expansionary fiscal policy
c)
expansionary monetary policy
d)
stagflation policy
29.
supply side policy is most effective during times of
a)
deflation
b)
recession
c)
stagflation
d)
a down turn
30.
the main purpose of supply side policy is
a)
to fight cost push inflation
b)
increase output
c)
shift the LRAS right
d)
move along the PPC to be more efficient
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