Which of the Following Policies Would Be Advocated by Proponents

question 19

Multiple Choice

Which of the following policies would be advocated by proponents of stabilization policy when the economy is experiencing severe unemployment?

• A)a decrease in the money supply
• B)an increase in tax rates
• C)an increase in government purchases
• D)an increase in interest rates.

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Definitions:

Cartel

A formal agreement among firms (or countries) in an industry to set the price of a product and establish the outputs of the individual firms (or countries) or to divide the market for the product geographically.

Economic Efficiency

A situation in which resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over another's based on their positive experience with that brand.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.