Which of the Following Is an Example of a Countercyclical

question 18

Multiple Choice

Which of the following is an example of a countercyclical policy?

• A) Government purchases are increased during a period of high unemployment.
• B) Taxes are increased during a period of high unemployment.
• C) Interest rates are increased during a period of high unemployment.
• D) The money supply is decreased during a period of high unemployment.

Analyze the impact of income changes on market demand for a product.

Understand the effect of complementary and substitute goods on market demand.

Calculate the necessary tax to achieve a desired decrease in consumption based on price elasticity of demand.

Calculate the optimal pricing strategy for maximizing profit taking into account the cost of production and elasticity of demand.