Which presidential administration is most closely associated with the economic p

Question

Which presidential administration is most closely associated with the economic policies of supply-side economics?

Multiple Choice

a. Clinton

b. Bush

c. Reagan

d. Obama

Refer to the graph. Assume that the economy is initially at equilibrium at point A. If there is a recession in the economy because AD1 shifts to AD2, and wages and prices are flexible, then in the long run the price level will be

Multiple Choice

a.P3 and real output will be Qf.

b.P2 and real output will be Q1.

c.P2 and real output will be Qf.

d. P1 and real output will be Qf.

Refer to the diagram and assume the economy is operating at equilibrium point w. In the long run, an increase in the price level from P2 to P3 would move the economy from point w to point

Multiple Choice

a. v.

b. y.

c. u.

d. x.

Refer to the graph. Assume the economy is at the initial position of B2. It is possible for the government to reduce the unemployment rate and move the economy to C2 if

Multiple Choice

a.expected inflation becomes 8 percent.

b.actual inflation remains at 4 percent.

c.expected inflation remains at 4 percent.

d. actual inflation is at 12 percent.

Explanation / Answer

1. Right answer c. Reagan

US President Ronald Reagan is so closely associated with supply-side economics that supply-side economics is often called Reaganomics. He advocated greater tax cuts for investors and entrepreneurs so that the benefits of saving and investment trickles down to everyone.

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