The best case scenario for fiscal policy is during a:
A. boom caused by an aggregate demand shock.
B. recession caused by an aggregate demand shock.
C. boom caused by a real shock.
D. recession caused by a real shock.
Answer: B. recession caused by an aggregate demand shock.
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If supply of a product increases and demand for the product decreases, equilibrium quantity will definitely change
Indicate whether the statement is true or false
If the price of a good increases, a consumer will substitute away from the relatively more expensive good, which will increase the marginal utility for that good and bring the consumer back to equilibrium
Indicate whether the statement is true or false
Everything else held constant, aggregate demand increases when
A) taxes are cut. B) government spending is reduced. C) animal spirits decrease. D) the money supply is reduced.
Convergence refers to the idea that cross-country
a. growth rates will become more similar over time. b. unemployment rates will become more similar over time. c. per-capita income levels will become more similar over time. d. total income levels will become more similar over time. e. none of the above.