If the Economic Problem Is Low Productivity and High Unemployment,the

question 19

Multiple Choice

If the economic problem is low productivity and high unemployment,the fiscal policy action on the demand side would be to

• A)increase taxes.
• B)cut business taxes.
• C)increase spending.
• D)decrease spending.
• E)None of these answers is correct.

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Definitions:

Distribution of Income

The way in which a nation’s total earnings are divided among its population, or the way in which wealth is shared amongst individuals.

Evade

To avoid or escape from something or someone, often by using cunning or deceit.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied responds infinitely to changes in price.

Excise Tax

A tax charged on specific goods and services, such as tobacco and alcohol, often implemented to discourage their use or raise government revenue.