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Supplementary objective test questions

4.9 Cyclical unemployment refers to unemployment

A which occurs because of the seasonal nature of some industries

B resulting from the long-term decline of an industry

C which occurs at particular times of the year

D which occurs during recessions

4.10 The government is concerned about the high level of voluntary
unemployment within the economy. Which of the following policies would
be most appropriate to deal with this problem?

A Reduce minimum wages

B Increase unemployment benefit

C Reduce the level of taxes on income

D Reduce the level of taxes on expenditure

4.11 If the government were frightened that the economy is going to enter a
recession, the best course of action would be:

A Raise interest rates, raise the reserve asset ratio

B Lower interest rates, lower the reserve asset ratio

C Raise interest rates, lower the reserve asset ratio

D Lower interest rates, raise the reserve asset ratio

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