A nation can determine how close it is to the classical range by considering its:
a. Unemployment rate.
b. Exchange rate.
c. Balance of payments position.
d. None of the above.
.A
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A change in all of the following variables will change the market demand for a product except
A) the price of the product. B) tastes. C) income. D) population and demographics.
The perfectly competitive model makes a lot of fairly unrealistic assumptions. Why do economics text books still talk a lot about this model?
A) Many markets are close to being perfectly competitive. B) It is an important model to use as a benchmark to compare other markets structures to. C) Perfectly competitive markets maximize societal welfare. D) All of the above.
To close a recessionary gap through fiscal policy, the government should
A) decrease government spending in order to increase aggregate supply. B) increase government spending in order to increase aggregate demand. C) reduce taxes in order to stimulate investment, and thus increase aggregate supply. D) increase government spending and taxes in order to both increase aggregate demand and aggregate supply.
When the feedback effects from income to the money market are included,
a. a given change in the money supply will cause a smaller change in the quantity of money demanded. b. a given change in the money supply will cause a larger change in the interest rate c. given change in the money supply will cause no change in the interest rate d. a given change in the money supply will cause a smaller change in the interest rate e. a given change in the money supply will cause a larger change in the quantity of money demanded.