In the Keynesian-cross model, if government purchases increase by 250, then the equilibrium level of income:
What will be an ideal response?
increases by more than 250.
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The greater are foreign tradable goods price fluctuations, the more likely that authorities will choose a ________ exchange rate system
A) floating B) fixed C) crawling peg D) dual
To combat a recession, Keynesian fiscal policy recommends:
a. an increase in taxes. b. an increase in government spending. c. an increase in taxes and a decrease in government purchases to balance the budget. d. a reduction in both taxes and government spending.
Frictional unemployment is joblessness
a. related to changes in weather and similar factors b. arising from a mismatch between available jobs and workers' skills c. resulting from macroeconomic fluctuations d. that is short-term and is experienced by people who are between jobs e. that is caused by structural changes in the economy
According to the adaptive rationality standard, individuals:
A. are irrational if they choose to have preferences that are not self-interested. B. might rationally choose to have preferences that are not self-interested. C. always behave according to their own narrow self-interest. D. are unable to choose what kind of preferences to have.