Which of the Following Policies Would Stabilization Policy Activists Support

question 21

Multiple Choice

Which of the following policies would stabilization policy activists support when the economy is experiencing unemployment above the natural rate?

• A)a decrease in the money supply
• B)a reduction in tax rates
• C)a decrease in government purchases
• D)None of the above is correct.

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Definitions:

Working Memory

A cognitive system responsible for temporarily holding information available for processing.

Chunks

In cognitive psychology, chunks refer to units of information grouped together and stored in the memory for easier recall.

Magic Number

Often referencing Miller's law, which suggests the number 7 (plus or minus 2) represents the amount of information a typical human memory can hold in the short term.

Working Memory

A cognitive system responsible for temporarily holding and processing information needed for complex tasks such as learning, reasoning, and comprehension.