Which of the Following Would Be an Example of Passive

question 248

Multiple Choice

Which of the following would be an example of passive policymaking?

• A) establishing a system of automatic tax stabilizers
• B) marginal rate tax cuts intended to increase real Gross Domestic Product (GDP)
• C) government spending decreases intended to decrease real Gross Domestic Product (GDP)
• D) raising the money supply when the unemployment rate increases.

---

Definitions:

Monopolist

A single seller in a market with no close substitutes for the product, giving the seller market power.

Marginal Revenue Product

The increase in revenue a firm expects from employing one additional unit of a resource, such as labor.

Labor Demand Curve

A graph showing the relationship between the quantity of labor demanded by employers and the wage rate, typically illustrating that higher wages lead to lower demand for labor.

Planning Horizon

The time period over which an individual, organization, or government plans for and anticipates future events and activities.