Structure (30 marks, 1 mark/answer)

1. ________________ is referred to as government actions concerning taxation and public expenditure

A. Monetary policy
B. Economic policy
C. Fiscal policy
D. Tax policy

2. During a(n) ________________, the demand for goods and services will decline and the economy will
begin to work below its potential.
A. upturn
B. boom
C. downturn
D. expansion

3. The fact that people start saving money and consuming less leads to a ________________ in demand,
production, and employment.
A. equilibrium
B. surplus
C. rise
D. fall

4. The company increased its production of the new shoes after a recent advertising campaign made the
________________ for the product increase rapidly.
A. trough
B. demand
C. deficit
D. surplus

5. The difference between the funds a country receives and those it pays for all internal transactions is
called ________________.
A. balance of payments
B. consumption decisions
C. equilibrium
D. gross domestic product

6. The total market value of all the goods and services produced in a country during a given period is
called ________________.
A. gross domestic product
B. balance of payments
C. consumptions
D. demand decline

7. ________________ is the economic theory that supports governmental intervention in the economy, to
counteract the business cycle.
A. Keynesianism
B. Monetarism
C. Classical economic theory
D. Friedman theory

8. The period during which radical innovations destroy established companies or industries is called
________________.
A. creative destruction
B. technological invention
C. trough
D. endogenous

9. If the economy's turning down, it may make sense for governments to have ________________, and to
keep expenditure in the economy.
A. budget surplus
B. budget deficit
C. budget equilibrium
D. budget supply

10. The upward and downward movement of aggregate output produced in the economy is referred to as
the ________________.
A. long-lasting recession
B. negative growth
C. business cycle
D. monetary expansion

11. Groups of people with a stake in or an interest in or a claim on the firm are called
________________.
A. stockholders
B. shareholders
C. bondholders
D. stakeholders

12. Countries where taxes are low, where multinational companies often set up their head offices, are
known as ________________.
A. tax launderers
B. tax harbors
C. tax havens
D. tax evasion