In the short run, a contractionary fiscal policy would cause
a. the AD curve to shift to the right
b. equilibrium real GDP to decrease and the price level to increase
c. the AS curve to shift left
d. the economy to slide along the AD curve
e. equilibrium GDP and the price level to fall
E
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Net exports is the key to the equality of aggregate expenditures and aggregate income.
Answer the following statement true (T) or false (F)
A sudden and pronounced loss of value of one nation's currency against others is known as a:
a. currency crisis. b. forced devaluation. c. thinning of value. d. default.
Government goods are delivered "free," which means that they are costless.
Answer the following statement true (T) or false (F)
Since people generally know that celebrities are paid to endorse products, celebrity endorsements signal to consumers that:
A. the product is likely to be popular. B. the celebrity loves the product. C. only rich people can afford the product. D. All of these