4) Choose the following tax methods that would reduce income inequality. A) Progressive. B) Proportional. C) Regressive. D) All the above.

5) Name the two concepts that the Phillips Curve describes. A) Inflation and Tax. B) Unemployment and Inflation. C) Tax and Income Inequality. D) Tax and Unemployment.

6) What does the lorenz curve help explain? A) Unemployment. B) Economic Growth. C) Income Inequality. D) Inflation.

7) Select the following component of aggregate demand. A) Household consumption. B) Government spending. C) Capital investment. D) All the above.

8) What is a consequence of unemployment on the individual level? A) Lower level of AD. B) Under-Utilization of resources. C) Increased poverty and crime. D) Decreased income.

9) What curve shifts to the left when stagflation occurs? A) None. B) AD. C) SRAS. D) LRAS.

10) Which of the following is NOT a reason why the AD curve slopes downwards? A) The government spending effect. B) The wealth effect. C) The interest rate effect. D) The net export effect.

11) Which of the following is NOT a determinant of net exports for aggregate demand? A) Exchange Rate. B) Foreign Incomes. C) Taste and Preferences. D) Technology.

12) The AD curve shows that, as the price level falls the quantity of A) GDP demand decreases. B) Real GDP demanded increases. C) Real GDP demanded decreases. D) GDP demanded decreases.

13) Unemployment benefits and Social Security are examples of the following. A) Tax reductions. B) Determinants of Inflation. C) Determinants of Economic Growth. D) Transfer Payments.

14) As the interest rate rises, businesses invest __________ and the AD curve shifts to the _________. A) more; left. B) less; left. C) more; right. D) less; right.

15) Which of the following increases in BOTH short-run and long-run economic growth? A) AD. B) AS. C) SRAS. D) LRAS.

16) Name the classical economist who founded the short run aggregate supply curve? A) Smith. B) Marx. C) Keyes. D) Marshall.

17) This type of unemployment occurs when individuals are waiting to find a new job. A) Inflationary. B) Frictional. C) Structural. D) Cyclical.

18) Select the following possible consequence of economic growth. A) Externalities. B) Inflation. C) Inequality. D) All the above.

19) Short-run aggregate supply is A) downward sloping. B) vertical. C) horizontal. D) upward sloping.

20) Which of the following would be the most desirable rate of inflation? A) 0% B) -1% C) 2% D) 7%