A way of helping depressed regions by having wage subsidies lower business taxes and capital subsidies has been suggested as ?

A. New classical economists
B. Left-wing theorists
C. Interventionist policies
D. Monetarists

According to supply side economists as tax rates are reduced labour supply should increase. This implies that ?

A. There is no income effect when tax rates are changed
B. The income effect of a wage change is greater than the substitution effect of a wage change.
C. There is no substitution effect when tax rates are changed
D. The substitution effect of a wage change is greater than the income effect of a wage change

Reaganomics was a radical shift in Policy aimed at direct tackling ?

A. The charities economy
B. The demand side of the country
C. The underground economy
D. The supply side of the economy

If injections are less than withdrawals at the full-employment level of national income, there is ?

A. An inflationary gap
B. Hysteresis
C. A deflationary gap
D. Hyperinflation

In Which of the business cycle do firms try to cut stocks in order to save costs ?

A. The upturn
B. The peeking out
C. The expansion
D. The recession

Which of the following would be considered a supply-side policy ?

A. An increase in the minimum wage that would cause consumer spending to increase
B. Investment tax credits for businesses to encourage investment
C. Restrictions placed on the amount that can be imported
D. An increased in government spending that would lead to increased aggregate demand

The marginal propensity to withdraw is ?

A. 1/investment multiplier
B. 1-(1/injections multiplier
C. Mps + mpt + mpm
D. The proportion of national income that is withdraw from the circular flow of income

The ratio of change in the equilibrium level of output to a change in some autonomous variable is the ?

A. Automatic stabiliser
B. Multiplier
C. Elasticity coefficient
D. Marginal propensity of the autonomous variable

Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?

A. 4
B. 25
C. 6
D. 2.5

Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?

A. Rs80 million
B. Rs20 million
C. Rs 15 million
D. Rs26.67 million