If the economy were in the Classical range of the aggregate supply curve, government policies and central bank actions should focus primarily on:
a. reducing unemployment.
b. increasing government spending to boost demand.
c. keeping inflation reasonably low.
d. preventing deflation.
e. All of the above.
.C
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How does an increase in the price level lead to a higher interest rate?
What will be an ideal response?
Any basket of goods that is missing food and energy items is:
A. missing a large portion of consumption. B. missing a small portion of a typical consumer's basket. C. a useless calculation. D. called the retail sales index.
?Which of the following factors did not contribute to the federal budget surpluses in the 1990s?
a. ?Higher taxes on the rich b. ?More federal government spending discipline c. ?Slower consumer spending d. ?Rising business optimism based on technological innovation e. ?Market globalization
The overall boost to economic activity that results from a government spending increase is called the
A. multiplier effect. B. economic effect. C. butterfly effect. D. aggregate demand effect.