The Federal Reserve econometric model estimates that a 1 percent increase in government spending, with the money supply increased to hold the interest rate constant, will
A) increase real GDP by 3 percent in 3 years.
B) increase real GDP by 3 percent in 4 years.
C) increase real GDP by 1 percent 2 years.
D) have no effect on real GDP after 3 years.
A
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In which of the following years did oil price movements contribute to holding down inflation?
A) 1986 B) 1998 C) 2001 D) All of the above.
Explain how
(i) a risk-averse individual, (ii) a risk-neutral individual, and (iii) a risk-preferring individual would respond to the opportunity of placing a bet at fair odds.
The initial impact of an increase in government spending is to shift
A. aggregate supply to the right. B. aggregate demand to the left. C. aggregate demand to the right. D. aggregate supply to the left.
Changes in government spending
A. are an indirect component of the expenditures schedule. B. have a different multiplier effect than changes in business investment spending. C. are a direct component of the expenditures schedule and have the same multiplier effect as changes in business investment spending. D. do not have an effect on spending if they are matched by tax changes.