Question Details

The International Monetary Fund said Spain- economy is likely to contract 



1. ”The International Monetary Fund said Spain- economy is likely to contract by “at least” 1% in 2009, and called on the government to …..” This clipping is best completed with 
a)	increase government spending 
b)	increase taxes 
c)	balance its budget 
d)	decrease unemployment benefits 

”Efforts to encourage spending during a downturn are not usually successful because ________, and so an increase in government spending would have to be exceptionally large.” The following two questions refer to this clip. 
2. The blank is best filled with 
a)	taxes are too high 
b)	the budget needs to be balanced 
c)	people are saving because of uncertainty 
d)	people are saving to enhance long run growth 

3. During a downturn the multiplier is 
a)	high because extra stimulus is needed 
b)	low because there is too much stimulus 
c)	high because the increase in government spending is large 
d)	low because the MPC shrinks 

4. “Everyone tightens their belts during a crisis, even though they may know that collectively this will lead to economic disaster.” Tightening belts means 
a)	spending less on food 
b)	spending less on clothing 


c)	higher taxes 
d)	higher saving 

5. “George W. Bush- $168 billion tax rebate plan of February of 2008 was designed to stimulate the U.S. economy, but it didn’t work, and so instead ……” The tax cut didn’t work because 
	it wasn’t big enough 
	people chose to save the tax cut 
	it created a budget deficit 
	other policies offset it 



Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help