https://drive.google.com/file/d/0B-vDGEamn7d7VDlUbnpaY2lCMjA/view 1. Since 2010,
ID: 1217729 • Letter: H
Question
https://drive.google.com/file/d/0B-vDGEamn7d7VDlUbnpaY2lCMjA/view
1. Since 2010, the Greek Government has implemented an austerity program. Based on the data, there is evidence to suggest that this policy may have been somewhat successful in achieving its primary objective.
a. True
b. False
2. Based on the data, it's clear that austerity has been successful in achieving all of Greece's economic objectives
a. True
b. False
3. From the December 2014 to April 2015, consumer spending is likely to have:
a. Increased
b. Remained constant
c. Become negative
d. Decreased
4. Deflation is not particularly harmful for an economy, hence why Central Banks rarely act to change it.
a. True
b. False
5. Which of the following is most likely to initially influence aggregate supply in the Greek economy?
a. Changes in expected inflation
b. New infrastructure projects paid for by the government
c. Changes in personal income tax rates
d. An increase in saving
Explanation / Answer
Answer 1:
In 2010, Greek government has implemented austerity program. Following evidence suggests that policy has been somewhat successful in achieving its objective.
Thus statement is true.
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Answer 2:
All economic objectives has not been successfully achieved. Inflation rate has remained almost static at -2%. Also objectives of improving deficit in budget has been achieved partially.
So statement is false.
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Answer 3:
Since consumers negative confidence level has dropped from 53.9 to 40.5, it is expected that consumer spending likely to have increased.
So option (a) is correct.
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Answer 4:
Deflation is not good for the society. It reduces demand for commodities. So production will drop. Investment will drop. Growth of the economy will come down. So government will try to improve this position by implementing policy change. Particularly fiscal policy will be changed by increasing government investment and reducing tax.
Thus statement is false
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