The natural employment surplus ________ be used to determine the effectiveness of discretionary fiscal policy actions because ________
A) cannot; it excludes non-discretionary spending changes
B) can; it includes non-discretionary spending changes
C) cannot; it includes non-discretionary spending changes
D) can; it excludes automatic stabilization expenditures
D
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Expectations that the price level will decrease in the future will _____
a. make the current consumption function flatter b. shift the current consumption function downward c. result in an upward movement along the current consumption function d. result in a downward movement along the current consumption function e. make the current consumption function steeper
Suppose the economy is at a point below its physical production possibilities frontier but above its institutional production possibilities frontier. In response to this situation, Keynesian economists may propose that government enact __________ fiscal policy to correct this __________ gap by __________ government expenditures
A) expansionary; inflationary; increasing B) contractionary; inflationary; decreasing C) expansionary; recessionary; increasing D) contractionary; recessionary; decreasing E) contractionary; inflationary; increasing
The quantity demanded of Coca Cola has increased. The best explanation for this is that
A. the price of Pepsi has decreased. B. the price of Coca Cola has decreased. C. Coca Cola consumers had an increase in income. D. Coca Cola has instituted a new, successful advertising campaign.
If the bidders at a first-price auction have true values of $78, $72, $66, and $65, the item will sell for
a. $78 b. just under $78 c. $72 d. just over $72