In the production function Real GDP = T (L, K), the T stands for tax coefficient
Indicate whether the statement is true or false
False
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Moving along the aggregate expenditure (AE) curve, when real GDP increases, aggregate planned expenditures increase
A) by the same percentage as does real GDP. B) by more than real GDP. C) proportionately with real GDP. D) by the same amount as does real GDP. E) by less than real GDP.
According to the Monetarists an increase in investment spending initially __________ unemployment so that the price level __________. The resulting __________ in the real money supply __________ spending
A) increases; rises; increase; decreases B) increases; falls; increase; increases C) decreases; falls; decrease; increases D) decreases; rises; decrease; decreases
Neo-Keynesians believe that the government will never have to choose between policies to control unemployment and policies to control inflation
Indicate whether the statement is true or false
Which of the following occurs when an expansionary gap is closed in the long run by the action of firms?
What will be an ideal response?