Question Details

Low saving makes it harder to increase living standards 



1. "Economist McKenzie attacks both American political parties' attraction to what he calls 'jobilism' - trying to create jobs mostly by protecting current jobs, thence reducing churn." Protecting current jobs is 
a) good because it avoids inflation b) good because it promotes efficiency 
c) bad because it creates unemployment d) bad because it inhibits productivity growth 
2. "Lipsey points to evidence that when demand is held too long below capacity output, capacity itself may shrink, at least relative to the potential labor force." Capacity would shrink because of low levels of 
a) investment b) consumption c) unemployment d) government spending 
3. "It seems that Americans prefer to cut down on their saving to maintain living standards; the catch is that a low saving rate makes it harder to increase living standards." Low saving makes it harder to increase living standards because it causes 
a) high taxes b) low investment c) low consumption d) low government spending 
4. "He believes that the nation's core economic problem remains slow growth in productivity - a condition that is worsened, if not caused, by Americans' historically low rate of ......." Complete this sentence. 
a) saving b) unemployment c) consumer spending d) government spending 36 
"On those rare occasions when the economic benefits of accelerated infrastructure spending are discussed, it is usually in the context of the countercyclical role assigned to such spending by John Maynard Keynes, leading to charges of make-work projects with little economic value. Precious little is said about the critical links that exist between quality infrastructure and ....... " 
5. Countercyclical government spending is 
a) offset by appropriate tax policy b) higher in booms and lower in recessions 
c) lower in booms and higher in recessions 
d) steady during all parts of the business cycle 
6. Complete this clipping. 
a) taxation b) inflation c) unemployment d) aggregate supply



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