The balanced budget multiplier is based on the point that the ________ multiplier is larger than the ________ multiplier so that an equal increase in government expenditure and taxes ________ aggregate demand
A) tax; expenditure; does not change
B) expenditure; tax; does not change
C) expenditure; tax; decreases
D) expenditure; tax; increases
E) tax; expenditure; decreases
D
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According to New Keynesians, which of the following is one of the two key factors that determines the inflation rate?
A) stock prices B) oil prices C) fiscal policy D) anticipated future inflation
In the presence of asymmetric information, high-cost and low-cost customers are charged ?asymmetric prices.
Answer the following statement true (T) or false (F)
If the consumption function is expressed as C = a + mpc × YD, then "a" represents
A) autonomous consumer expenditure. B) the marginal propensity to consume. C) the expenditure multiplier. D) disposable income.
If a policymaker is convinced that time lags frequently negate the impact of short-run stabilization efforts, it is likely she would favor ________ policymaking.
A. aggressive B. discretionary C. active D. nondiscretionary