Stimulus Based Multiple Choice Questions
Stimulus Based Multiple Choice Questions. The world war 1 exam below consists of: Ap practice unit 4 (answers) ap pactice unit 4.
If politicians are using the term "stimulus" they usually mean the government's spending. For economists, stimulus could be in part spending however not every expenditure is "stimulus."
Why isn't all spending classified as the proper type of "stimulus?" We analyze "stimulus" by looking at its effects, for instance the amount of multiplier effect (additional dollars from initial expenditure) and the velocity effect (the rate at which the dollars move through the economy) and whether the effect is immediate. We also determine whether the spending is coming from existing government revenue or out borrowing dollars, as each has different ancillary effects.
In addition, not all "stimulus" is government spending; "stimulus" can be something else, like tax cuts. The tax cuts, as well as spending represents the use of the government's revenue. By delaying revenue while taxes are cut to encourage spending by the private sector, which in the right conditions can have critical immediate impact and enormous multiplier effects as well as velocity effects.
These distinctions between types of expenditure and their stimulating effect are vital. What's the most simple example of spending that is instantaneous but has little multiplier or turn over effect? Imagine that you consume five glasses of filtered water each day.
Imagine that, as a "stimulus" the government paid you to drink an additional or sixth glass of water each day. It's a direct result of promoting water production and consumption. But once the glass of water is consumed, there cannot be a multiplier. All that the government bought was one glass of water over normal. In order to get another glass of water, the government will have to pay once more. When the government stops paying that extra drink, it stops. Since it doesn't promote continuous drinking by you or anyone else, there is no velocity or multiplier effect.
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Learn how to ace the stimulus based multiple choice part of the ap exam. How to take a s. Section i includes multiple choice and short answer questions.
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