Expansionary fiscal policy can be used to reduce unemployment by
A) increasing long-run aggregate supply so as to raise real GDP.
B) increasing aggregate demand so as to raise real GDP.
C) reducing nominal wages so as to encourage firms to hire more workers.
D) eliminating inefficiencies from labor markets.
Answer: B) increasing aggregate demand so as to raise real GDP.
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Which of the following goods will have the most inelastic demand at any time?
A. Jewelry B. Big Macs C. Electricity D. Pork chops
The money supply known as M2:
a. includes large denomination time deposits. b. excludes interest-earning checking accounts in savings and loans. c. does not include money market mutual accounts. d. includes savings accounts and small denomination time deposits. e. includes large denomination repurchase agreements.
If a tax is economical,
a. its cost of collection is small relative to the revenue collected. b. it has an economic impact on households. c. it creates no economic distortions. d. its revenues are used to finance productive investments.
The derived demand curve for loans slopes downward because as interest rates
a. fall, future income becomes less valuable. b. fall, investors develop pessimistic expectations. c. fall, future income becomes more valuable. d. rise, investors become pessimistic.