One empirical prediction from the model which includes government purchases is that
a. permanent changes in real government purchases increase real GDP.
b. permanent changes in nominal government purchases increase nominal GDP.
c. permanent changes in real government purchases decrease real GDP.
d. permanent changes in real government purchases have little impact on real GDP.
Answer: d. permanent changes in real government purchases have little impact on real GDP.
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The above table gives techniques that Fatz Confectionery can use to produce 2,000 pounds of candy. Which technique is technology inefficient?
A) A B) B C) C D) D
Why is the time lag for making fiscal policy changes longer than for making monetary policy changes?
Which of the following statements about market economies is correct?
a. In a market economy, no one is looking out for the economic well-being of society as a whole. b. Market economies are characterized by decentralized decision making and self-interested decision makers. c. Market economies have proven remarkably successful in promoting overall economic well-being. d. All of the above are correct.
In the United States, the minimum wage is defined as
A) the wage that the youngest job entrant into the job market makes. B) the lowest wage that a corporation should pay a worker if the corporation wants to ensure that its employees are well trained. C) the lowest hourly wage rate a firm may legally pay its workers, as legislated by the U.S. government. D) the wage ceiling above which a firm no longer must pay its employees additional benefits.