Which are contractionary fiscal policies?
a. Increased taxation and decreased government spending
b. Increased taxation and increased government spending
c. No change in taxation and increased government spending
d. Decreased taxation and no change in government spending
a. Increased taxation and decreased government spending
You might also like to view...
If the Fed adopts a contractionary monetary policy, eventually we can expect: a. aggregate demand to increase
b. short-run aggregate supply to decrease. c. interest rates to decrease. d. planned investment expenditures to decrease. e. real Gross Domestic Product to increase.
Under a principal/agent relationship, the agent faces high costs of determining whether the principal is actually making efforts to the extent the agent expects
Indicate whether the statement is true or false
Suppose the economy is in long-run equilibrium. In a short span of time, there is a pessimistic revision of expectations about future business conditions and an unexpected rise in the value of the dollar. In the short run, we would expect
a. the price level and real GDP both to rise. b. the price level and real GDP both to fall. c. the price level and real GDP both to stay the same. d. All of the above are possible.
The main problem with price subsidies is that they:
A. lead to a decrease in demand. B. lower total economic surplus. C. do not help the poor afford essential goods and services. D. are not effective at lowering prices.