Macroeconomic Policy Activism

question 211

Multiple Choice

Macroeconomic policy activism:

• A) is the use of monetary and fiscal policy to smooth out the business cycle.
• B) is the primary theory of classical economics.
• C) gives the Federal Reserve the sole responsibility for economic policy.
• D) advocates that all of the people in a democracy should decide what type of economic policy is appropriate.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale.

Variable Costs

Expenses that vary directly with the level of production or output, such as raw materials and labor costs.

Output

The total amount of goods or services produced by a company or an economy.

Total Variable Costs

The sum of all costs that vary with the level of production, such as materials and labor, as opposed to fixed costs which remain constant regardless of production level.