1.

(03.09 MC) As GDP increases, tax revenue _____ and the unemployment rate generally ______. (5 points)

	decreases; decreases
	increases; increases
	decreases; increases
	increases; decreases
	increases; stays the same

2.

(03.09 LC) Which of the following is an example of an automatic stabilizer? (5 points)

	Discretionary spending
	A new tax law
	The multiplier effect
	Time lag
	Unemployment benefits

3.

(03.09 MC) Increasing tax revenues and falling transfer payments are an automatic response to (5 points)

	long-term economic growth
	an inflationary period
	a recessionary period
	price level disequilibrium
	an aggregate demand decrease

4.

(03.09 MC) Which of the following accurately describes the relationship between social service programs and the business cycle? (5 points)

	Social service programs act completely independently of the business cycle.
	Social service programs can help with recessions but do not slow inflation.
	Social service programs can help with inflation but do not alleviate recessions.
	Social service programs tend to intensify recessions and inflationary periods.
	Social service programs help alleviate cyclical unemployment and inflation.

5.

(03.09 MC) Which of the following statements about a progressive income tax structure is accurate? (5 points)

	It is the least effective type of automatic stabilizer.
	The less a person earns, the greater their tax burden.
	The more a person earns, the greater their tax burden.
	A person can end up making less after taxes after an income increase.
	It has the tendency to worsen recessionary and inflationary cycles.