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Chapter 2 Thinking Like an Economist




Question;67. Larry Summers, a chief economic adviser to President Obama, stated;that as a result of using Keynesian policies in 2008 and 2009;a.;US;government policy moved in a strongly activist direction.;b.;the US;has shifted from worrying about an economic depression to thinking about what;kind of expansion the country will have.;c.;the US;has shifted from rescuing the economy to economic recovery.;d.;All of;the above are correct.;68. Economist Joseph Schumpeter coined the phrase ?creative;destruction? to describe the process by which;a.;the;government destroys the failing markets that caused an economic crisis.;b.;innovation;and enterpreneurial initiative have great power to drive economic growth.;c.;economists;destroy long-held beliefs about how markets function.;d.;free;markets need government intervention to create economic growth.;Why Economists Disagree;1. ?If;all economists were laid end to end, they would not reach a conclusion.? Who made this whimsical observation?;a.;Harry;Truman;b.;George;Bernard Shaw;c.;John;Maynard Keynes;d.;Ronald;Reagan;2. President Ronald Reagan once joked that a;Trivial Pursuit game designed for economists would;a.;have no;questions but hundreds of answers.;b.;have 100;questions and 3,000 answers.;c.;have;1,000 questions but no answers.;d.;never;produce a winner.;3. Economists sometimes give conflicting advice;because;a.;graduate;students in economics are encouraged to argue with each other.;b.;economists;have different values and scientific judgment.;c.;economists;acting as scientists do not like to agree with economists acting as policy;advisers.;d.;economics;is more of a belief system than a science.;4. The two basic reasons why economists often;appear to give conflicting advice to policymakers are differences in;a.;opinions;and education.;b.;opinions;and values.;c.;scientific;judgments and education.;d.;scientific;judgments and values.;5. Sometimes economists disagree because their;scientific judgments differ. Which of;the following instances best reflects this source of disagreement?;a.;One;economist believes income tax cuts are unfair to those with low incomes;another economist believes income tax cuts are not unfair to those with low;incomes.;b.;One;economist believes unemployment causes more human suffering than does;inflation, another economist believes inflation causes more human suffering;than does unemployment.;c.;One;economist believes the policies of the Democratic party offer the best hope;for America's future, another economist believes the policies of the;Republican party offer the best hope for America's future.;d.;One;economist believes increases in the minimum wage increase unemployment;another economist believes increases in the minimum wage do not increase;unemployment.;6. Sometimes economists disagree because their;values differ. Which of the following instances;best reflects this source of disagreement?;a.;One;economist believes the North American Free Trade Agreement (NAFTA) has led to;a loss of American jobs, another economist disputes this claim.;b.;One;economist believes that when income taxes are cut, people will increase their;spending, another economist believes that when income taxes are cut, people;will increase their saving.;c.;One;economist advises against increases in sales taxes because she thinks such;increases are unfair to low-income people, another economist disputes the;idea that increases in sales taxes are unfair to low-income people.;d.;One;economist believes that, prior to the Civil War, slavery contributed to;economic growth in the South, another economist believes that slavery held;back the South's economic growth.


Paper#55195 | Written in 18-Jul-2015

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