Can macroeconomic policy be used systematically to create unanticipated inflation?
A) No, according to Keynesian economists.
B) Yes, according to classical economists.
C) No, according to classical economists.
D) Yes, according to Keynesian economists, if Ricardian equivalence holds.
C
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Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $5, what is the value of marginal product of the 4th worker?
A) $300 B) $50 C) $70 D) $10
Using the ISLM model, show graphically and explain the effects of a monetary contraction. What is the effect on the equilibrium interest rate and level of output?
What will be an ideal response?
A prominent argument against the use of price ceilings is:
A. they lead to a surplus and a waste of society's resources. B. they are unfair. C. they raise corporate profits. D. they lead to rent seeking.
Refer to the graph shown. Expansionary fiscal policy is most likely to shift the aggregate demand curve from:
A. AD0 to AD2 if crowding out does not occur and from AD0 to AD3 if crowding out does occur. B. AD2 to AD0 if crowding out does not occur and from AD1 to AD3 if crowding out does occur. C. AD0 to AD2 if crowding out does not occur and from AD0 to AD1 if crowding out does occur. D. AD2 to AD0 if crowding out does not occur and from AD1 to AD2 if crowding out does occur.