If monetary policy is used to control real GDP then fiscal policy is a major determinant of
A) interest rates and economic growth.
B) interest rates and the foreign trade deficit.
C) unemployment and the foreign exchange rate.
D) None of the above.
A
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Which of the following is a possible government solution to the problem posed by a good with an external benefit?
A) Give a voucher to buyers of the good. B) Tax the consumption of the good. C) Tax the production of the good. D) All of the above are possible solutions.
The law of increasing additional cost exists because
A) resources are not perfectly adaptable to both production processes. B) the demand for the product increases. C) the cost of resources of the products increase. D) the cost of resources of the products decrease.
If the price elasticity of demand for apples is greater than 1, an increase in apple prices will
A) raise total revenue. B) lower total revenue. C) not affect total revenue. D) either raise or lower total revenue, but it is impossible to determine which.
Transfer earning is the minimum amount that has to be paid to a factor to allocate it in its next best alternative use
a. True b. False Indicate whether the statement is true or false