Supply-side Policy Quiz by Shubhrata Shrestha | May 30, 2025 | 0 comments Supply-side Policy Quiz 1. What is the primary goal of supply-side policy? A. Increase government spending B. Increase the economy’s productive capacity C. Reduce aggregate demand D. Control exchange rates None 2. Which of the following is a supply-side policy tool? A. Increasing interest rates B. Investing in infrastructure C. Imposing tariffs D. Cutting exports None 3. A rightward shift in the LRAS curve indicates: A. An increase in the economy’s potential output B. Rising interest rates C. A reduction in government spending D. An increase in imports None 4. Which is a disadvantage of supply-side policies? A. They reduce productivity B. They often have long implementation lags C. They decrease employment D. They cause hyperinflation None 5. What is the likely effect of effective supply-side policy on unemployment? A. It reduces structural unemployment B. It increases cyclical unemployment C. It eliminates seasonal unemployment D. It has no impact None 6. Which of the following is NOT a supply-side policy? A. Training programs for workers B. Lowering corporate taxes C. Increasing interest rates to reduce inflation D. Deregulation of industries None 7. How do supply-side policies affect the price level in the long run? A. They always increase it B. They have no effect C. They help reduce inflationary pressures D. They make inflation unpredictable None 8. Which of the following supports innovation in the economy? A. Tariffs on imports B. Research and development subsidies C. Interest rate hikes D. Import quotas None 9. One advantage of privatization as a supply-side policy is: A. It may lead to greater efficiency through profit incentives B. It guarantees lower unemployment C. It reduces government revenue D. It eliminates inequality None 10. In the AD/AS model, effective supply-side policy leads to: A. A movement along the AD curve B. A rightward shift in LRAS and higher output C. Higher prices and lower output D. A shift in the demand curve None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
