An example of contractionary fiscal policy is
A) increasing government spending.
B) increasing taxes.
C) decreasing government spending.
D) decreasing taxes.
E) b and c
E
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Expansions of aggregate demand cause the economy to move along what is essentially a vertical aggregate supply curve when
A) wage increases catch up to inflation. B) higher prices can reduce interest rates no further. C) money supply growth rises to equal the rate of aggregate demand expansion. D) from a recession level of output, full employment is reached.
The "crowding-out effect" suggests that
A. government spending is increasing at the expense of private investment. B. imports are replacing domestic production. C. private investment is increasing at the expense of government spending. D. consumption is increasing at the expense of investment.
If the economy experiences inflation, aggregate...
What will be an ideal response?
An increase in unplanned inventory investment for the entire economy equals the excess of
A) output over aggregate supply. B) output over aggregate demand. C) aggregate supply over output. D) aggregate demand over output.