Question 36 The main difference between stabilization policies and structural re

Question

Question 36

The main difference between stabilization policies and structural reform policies is that stabilization policies

Select one:

a. focus on macroeconomic issues and structural reform policies focus on the microeconomic environment.

b. have smaller economic impacts than structural reform policies.

c. focus on microeconomic issues and structural reform policies focus on the macroeconomic environment.

d. create less unemployment than structural reform policies.

e. are rarely used by reform governments; they prefer to use structural reform policies in their place.

Question 37

Which of the following has not been promoted by HPAE?

Select one:

a. Large job creation in the government sector

b. Free basic health care

c. Significant investments in rural infrastructure

d. Land reform

Question 38

All of the following are possible outcomes of a banking crisis except

Select one:

a. a recession due to decreases in consumption by households.

b. a contagion effect of the crisis from vulnerable banks to financial institutions on sound basis.

c. depositors, but not banks, may lose all or a portion of their assets.

d. decreases in lending practices by banks.

e. decreases in investment.

Question 39

EU deepening refers to

Select one:

a. activities that cause increased levels of integration in the national economies.

b. adding additional countries into the single currency area.

c. legislation that restricts the sovereignty of individual countries.

d. extending the boundaries of the EU to include new members.

Question 40

Changes in aggregate demand

Select one:

a. are not affected by changes in government policies.

b. are very uncommon.

c. are primarily based on changes in firms' abilities to produce products.

d. could be caused by changes in the spending decisions of the households, businesses, the government, and foreigners.

e. are unlikely to change quickly in response to economic events.

Explanation / Answer

36) a) focus on macroeconomic issues and structural reform policies focus on the microeconomic environment. This is the difference between both these issues or policies.

37)a) Large job creation in the government sector. All other options including land reform, free basic healthcare, and investments in rural infrastructure are promoted by them.

38) c) Depositors, but not banks, may lose all or a portion of their assets. All others are possible outcomes of a banking crisis. Decreases in investments, lending practices by banks and recession are all outcomes of this crisis.

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