AnswersMI-Economics CRIntroduction to Economics

Economic Policy Answers

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1
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A government's monetary policy is its plan to control

A
taxation and spending.
B
prices.
C
workers' wages.
D
the money supply.
2
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In a free enterprise system, what are the goals of government? Check all that apply.

A
to ensure safety for its citizens
B
to ensure that citizens' needs are met
C
to stay out of all economic decisions
D
to solve the problem of poverty
E
to prevent citizens from getting rich
F
to ensure that the market is fair
3

What are economic challenges that governments must face? Check all that apply.

A
threats of war
B
unemployment
C
low production
D
inflation
E
low voter turnout
4

The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013.

Question illustration
A
reducing the size of its armed forces
B
laying off unnecessary workers
C
decrease taxes to increase consumers' money supply
D
encouraging people to travel overseas
5

What is a primary economic goal of governments?

A
reducing income inequality
B
maximizing individual freedoms
C
advancing technological innovation
D
protecting natural resources
6

Which of these policies would a government take when it comes to employment?

A
paying government employee when they choose to not work
B
seeing that at least a quarter the workforce has a job
C
working toward making unemployment is as low as possible
D
making sure that only skilled workers get jobs
7

Country Q has experienced a rapid increase in its unemployment rate and a sharp decline in its GDP.What might policymakers do in the face of these economic indicators?

A
encourage a decrease in purchasing until employment figures increase
B
try to trade with other nations to increase production and create new jobs
C
increase taxes so the government has more money to spend
D
implement controls on wages, forcing employers to pay higher wages
8

Read the scenario.The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP.

A
the government of Country D
B
the enterprises of Country D
C
the businesses of Country D
D
the workers of Country D
9

Rules ensuring that businesses offer safe products to consumers are part of a nation's

A
trade policy.
B
monetary policy.
C
regulatory policy.
D
fiscal policy.
10

A line graph titled Number of Employed workers in nonfarm jobs, 2008 to 2013 shows years on the x axis from 2008 to 2009 and millions of employed workers on the y axis, from 105 to 117. Line starts at 116 on February 1, 2008, to 112 on November 1, 2008, to 107 on August 1, 2009.

Question illustration
A
low production
B
inflation
C
budget deficit
D
unemployment

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