When government spending flows to areas where resources are already fully employed,
a. the additional spending will stimulate strong growth in those areas.
b. aggregate demand will place downward pressure on the general level of prices.
c. the coordination problem accompanying the composition of aggregate demand is likely to improve.
d. the coordination problem accompanying the composition of aggregate demand is likely to worsen.
D
You might also like to view...
Property rights often remain poorly defined because of _____
a. difficulty enforcing ownership once defined b. government fiat c. strong incentives towards the status quo d. monopolies
Since a firm in perfect competition is a price taker, the demand curve for the firm's product is a horizontal line
a. True b. False Indicate whether the statement is true or false
The total demand line will shift whenever:
A) the MPC increases. B) output changes. C) there is an exogenous change in one of its components (C, I, G, or X). D) aggregate supply increases there is an exogenous change in one of its
One example of thinking at the margin is:
a) determining whether it is better to spend your savings on a new CD player or on a television b) deciding whether the benefit of working two extra hours per day is worth the sacrifice of study time c) putting all your money in a savings account because the interest rates are so high d) deciding to buy a car you don't really like because it is significantly less expensive than the one you want