Which of the following most clearly indicates that fiscal policy is becoming more restrictive?
a. An increase in the budget deficit relative to GDP
b. A reduction in the budget deficit relative to GDP
c. An increase in government expenditures as a share of GDP
d. A reduction in tax revenues as a share of GDP
B
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Planned aggregate expenditure is equal to
A) consumption spending plus planned investment spending. B) consumption spending plus planned investment spending plus government purchases plus net exports. C) planned investment spending only. D) consumption spending only.
Which of the following does not determine the position and shape of a society's PPF?
a. physical resources b. price level c. skills and technology d. past construction of factories and research
Which of the following shifts aggregate demand to the right?
a. The price level rises. b. The price level falls. c. The money supply falls. d. None of the above is correct.
Which of the following explains why a $100 billion reduction in consumption spending might decrease equilibrium real GDP by more than $100 billion?
A. Say's law. B. The quantity theory of money. C. Flexible resource prices. D. The multiplier principle.