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The Impact of Economic Activism on Economic Growth

Description: This quiz assesses your understanding of the impact of economic activism on economic growth. Economic activism refers to government policies and actions aimed at influencing the economy, often with the goal of promoting economic growth.
Number of Questions: 16
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Tags: economics economic activism economic growth
Attempted 0/16 Correct 0 Score 0

What is the primary objective of economic activism?

  1. To promote economic stability

  2. To stimulate economic growth

  3. To reduce economic inequality

  4. To control inflation


Correct Option: B
Explanation:

Economic activism aims to influence the economy, often with the goal of promoting economic growth.

Which economic activist policy is designed to increase aggregate demand and stimulate economic growth?

  1. Expansionary monetary policy

  2. Contractionary monetary policy

  3. Expansionary fiscal policy

  4. Contractionary fiscal policy


Correct Option: C
Explanation:

Expansionary fiscal policy involves increasing government spending or cutting taxes to increase aggregate demand and stimulate economic growth.

How does expansionary monetary policy influence economic growth?

  1. By increasing interest rates

  2. By decreasing interest rates

  3. By increasing the money supply

  4. By decreasing the money supply


Correct Option: B
Explanation:

Expansionary monetary policy involves decreasing interest rates to encourage borrowing and spending, thereby stimulating economic growth.

What is the potential downside of excessive economic activism?

  1. Economic growth

  2. Inflation

  3. Unemployment

  4. Economic stability


Correct Option: B
Explanation:

Excessive economic activism, particularly expansionary policies, can lead to inflation if the economy overheats.

Which economic activist policy is designed to reduce aggregate demand and combat inflation?

  1. Expansionary monetary policy

  2. Contractionary monetary policy

  3. Expansionary fiscal policy

  4. Contractionary fiscal policy


Correct Option: D
Explanation:

Contractionary fiscal policy involves decreasing government spending or raising taxes to reduce aggregate demand and combat inflation.

How does contractionary monetary policy influence economic growth?

  1. By increasing interest rates

  2. By decreasing interest rates

  3. By increasing the money supply

  4. By decreasing the money supply


Correct Option: A
Explanation:

Contractionary monetary policy involves increasing interest rates to discourage borrowing and spending, thereby slowing economic growth.

What is the potential downside of insufficient economic activism?

  1. Economic growth

  2. Inflation

  3. Unemployment

  4. Economic stability


Correct Option: C
Explanation:

Insufficient economic activism, particularly contractionary policies, can lead to unemployment if the economy slows down too much.

Which economic activist policy is designed to promote economic equality and social welfare?

  1. Progressive taxation

  2. Regressive taxation

  3. Flat taxation

  4. Proportional taxation


Correct Option: A
Explanation:

Progressive taxation involves higher tax rates for higher incomes, aiming to promote economic equality and social welfare.

How does progressive taxation influence economic growth?

  1. By increasing government revenue

  2. By decreasing government revenue

  3. By increasing economic inequality

  4. By decreasing economic inequality


Correct Option: A
Explanation:

Progressive taxation increases government revenue, which can be used to fund public programs and services that promote economic growth.

What is the potential downside of excessive progressive taxation?

  1. Economic growth

  2. Inflation

  3. Unemployment

  4. Economic stability


Correct Option: A
Explanation:

Excessive progressive taxation can discourage investment and entrepreneurship, potentially slowing economic growth.

Which economic activist policy is designed to promote economic stability and prevent economic fluctuations?

  1. Expansionary monetary policy

  2. Contractionary monetary policy

  3. Expansionary fiscal policy

  4. Contractionary fiscal policy


Correct Option: A
Explanation:

Expansionary monetary policy involves decreasing interest rates to stimulate economic growth and prevent economic fluctuations.

How does expansionary monetary policy influence economic stability?

  1. By increasing interest rates

  2. By decreasing interest rates

  3. By increasing the money supply

  4. By decreasing the money supply


Correct Option: B
Explanation:

Expansionary monetary policy involves decreasing interest rates to encourage borrowing and spending, thereby stimulating economic growth and promoting economic stability.

What is the potential downside of excessive expansionary monetary policy?

  1. Economic growth

  2. Inflation

  3. Unemployment

  4. Economic stability


Correct Option: B
Explanation:

Excessive expansionary monetary policy can lead to inflation if the economy overheats.

Which economic activist policy is designed to promote economic growth through infrastructure investment and public works?

  1. Expansionary monetary policy

  2. Contractionary monetary policy

  3. Expansionary fiscal policy

  4. Contractionary fiscal policy


Correct Option: C
Explanation:

Expansionary fiscal policy involves increasing government spending, often on infrastructure and public works, to stimulate economic growth.

How does expansionary fiscal policy influence economic growth?

  1. By increasing interest rates

  2. By decreasing interest rates

  3. By increasing government spending

  4. By decreasing government spending


Correct Option: C
Explanation:

Expansionary fiscal policy involves increasing government spending to stimulate economic growth by creating jobs and boosting aggregate demand.

What is the potential downside of excessive expansionary fiscal policy?

  1. Economic growth

  2. Inflation

  3. Unemployment

  4. Economic stability


Correct Option: B
Explanation:

Excessive expansionary fiscal policy can lead to inflation if the economy overheats.

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