2025 Government in the Macroeconomy Review

In modified markets, the economy is based on ________ of resources, free enterprise and markets.

• private ownership

• public ownership

• government control

• collective bargaining

The role of government intervention in the macroeconomy is to:

• stabilize the economy and promote growth

• eliminate all private businesses

• increase unemployment rates

• reduce the money supply to zero

Which of the following is NOT listed as an area improved by government intervention?

• Provision of goods and services

• Redistribution of income

• Regulation of business

• Technological innovation

• Macroeconomic management

Two areas where government intervention is used to improve outcomes in the macroeconomy are:

• Fiscal policy and monetary policy

• Private investment and consumer spending

• Export promotion and import substitution

• Technological innovation and entrepreneurship

In modified market systems, the economy is based on government ownership of resources.

• True

• False

What are the features of a strong economy according to the passage below?

A strong economy features economic growth and low unemployment, with moderate inflation.

Governments apply fiscal and monetary policies to manage aggregate demand and counter the effects of business cycle in the short term.

• High unemployment and high inflation

• Economic growth, low unemployment, and moderate inflation

• Low economic growth and high inflation

• High unemployment and low inflation

Governments apply ______ and ______ policies to manage aggregate demand and counter the effects of business cycle in the short term.

• fiscal; monetary

• trade; industrial

• labor; environmental

• tax; regulatory

Most governments actively manage business cycle fluctuations.

• True

• False

Which building is associated with the Reserve Bank in the image?

• Treasury Building, Canberra

• Reserve Bank, Sydney

Which building is associated with the Treasury in the image?

• Treasury Building, Canberra

• Reserve Bank, Sydney