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5 Written questions

5 Matching questions

  1. Capitalism
  2. Limited Liability
  3. Frictional Unemployment
  4. The Laffer Curve
  5. Structural Unemployment
  1. a Unemployment that occurs because job-seekers and employers need time to find each other
  2. b the responsibility of a business's owners for losses only up to the amount they invest
  3. c an economic system based on private ownership of capital
  4. d Unemployment because the skills needed for a job do not match those of the unemployed, or the unemployed do not live where the jobs are located
  5. e A graph showing total tax revenue as a function of the tax rate. Used by "supply-side" economists to support arguments for a tax cut or increase

5 Multiple choice questions

  1. The interest a bank pays another bank for an overnight loan
  2. The cash that a bank has in its vault plus any deposits that a bank has at the Federal Reserve
  3. When taxes increase, welfare and unemployment compensation decrease in response to an economic expansion. This lessens the increase in disposable income
  4. the idea that taxpayers with a greater ability to pay taxes should pay larger amounts. The problem is "how much more?"
  5. Theory based on the principles of John Maynard Keynes, stating that government spending should increase during business slumps and be curbed during booms.

5 True/False questions

  1. Bank AssetsThings that an economic unit owns that have value


  2. StagflationA contraction of a nation's output accompanied by an inflation in the price level


  3. Discouraged Workera person who wants a job but has given up looking


  4. Proportional Taxa tax for which the percentage of income paid in taxes remains the same for all income levels


  5. Comparative Advantagetotal tax paid divided by total (taxable) income, as a percentage