Krugman's Economics for AP

Margaret Ray

Chapter 20 Economic Policy and the Aggregate DemandAggregate Supply Model - all with Video Answers

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Chapter Questions

Problem 1

Which of the following contributes to the lag in implementing fiscal policy?
I. It takes time for Congress and the president to pass spending and tax changes.
II. Current economic data take time to collect and analyze.
III. It takes time to realize an output gap exists.
a. I only
b. II only
c. III only
d. I and III only
e. I, II, and III

Tristan Wille

Numerade Educator

Problem 2

Which of the following is a government transfer program?
a. Social Security
b. Medicare/Medicaid
c. unemployment insurance
d. food stamps
e. all of the above

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Problem 3

Which of the following is an example of expansionary fiscal policy?
a. increasing taxes
b. increasing government spending
c. decreasing government transfers
d. decreasing interest rates
e. increasing the money supply

Rashmi Sinha

Numerade Educator

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Problem 4

Which of the following is a fiscal policy that is appropriate to combat inflation?
a. decreasing taxes
b. decreasing government spending
c. increasing government transfers
d. increasing interest rates
e. expansionary fiscal policy

Rashmi Sinha

Numerade Educator

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Problem 5

A cut in income raxes is an example of
a. an expansionary fiscal policy.
b. a contractionary fiscal policy.
c. an expansionary monetary policy.
d. a contractionary monetary policy.
e. none of the above.

Rashmi Sinha

Numerade Educator