Question 10 (1 point) Supply-side theory suggests the effects of changes in taxes Lower tax rates lead to an increase in productivity because individuals will work harder and longer, save more, and invest more Increased productivity will in turn lead to more economic growth, thus higher real GDP Results: Lower marginal tax rates will not necessarily reduce tax revenues due to a larger lax base All of the above Question 11 (1 point) Time Lags are an issue with Discretionary Fiscal Policy because Recognition Time Lag - The time required to gather information about the current state of the economy Action Time Lag . The time required between recognizing an economic problem and putting policy into effect Effect Time Lag - The time it takes for a fiscal policy to affect the economy Banking Time Lag . The time it takes banks to react to changes in fiscal policy before it affects the economy. Question 12 (1 point) Examples of Automatic or Built-In Stabilizers include: Welfare spending The tax system Unemployment compensation State and local government spending Question 13 (1 point) Government Budget Deficit exists because government spends more than it receives in taxes during a given period of time True False Question 14 (1 point) For something to serve as money, it must be backed by the authority of the government. generally accepted by buyers and sellers. Olight, durable, and common. convertible to gold All of the above Question 15 (1 point) The direct exchange of goods and services for other goods and services is known as A) primitive trade B) nonmarket trade. [) barter D) purchasing power parity