Suppose the Economy Has a High Level of Unemployment and a Low

question 140

Multiple Choice

Suppose the economy has a high level of unemployment and a low level of aggregate output.Which of the following policies could the government implement to alleviate these conditions?

• A)an expansionary fiscal policy that increases tax rates
• B)a contractionary fiscal policy that increases government purchases
• C)automatic fiscal stabilizers
• D)a contractionary fiscal policy that increases tax rates
• E)an expansionary fiscal policy that increases government purchases

Understand the concept and calculation of the margin of safety.

Evaluate the effects of changes in sales, costs, and prices on a company's break-even point and profitability.

Apply the concept of operating leverage and its impact on a company's financial risk.

Understand the concept of break-even analysis and its application in business decision making.

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Definitions:

Rights Affected

The legal entitlements or interests that are influenced or altered by legal decisions, actions, or agreements.

Circular Reasoning

A fallacy in which the conclusion of an argument is assumed in one of the premises.

Bandwagon Fallacy

A logical fallacy that argues something must be true or good because many people believe it or do it.

Argumentum Ad Baculum

A fallacy that uses the threat of force or intimidation to persuade others to accept a conclusion.