In the Keynesian model in the short run, a decrease in government purchases causes output to ________ and the real interest rate to ________
A) fall; rise
B) fall; fall
C) rise; rise
D) rise; fall
B
You might also like to view...
All of the following unambiguously contribute to economic growth EXCEPT
A) increase in human capital. B) increase in technology. C) increase in labor productivity. D) increase in government spending.
Suppose the government wants to increase the price of a specific agricultural product. Discuss the welfare effects of four possible policies: price floor, price support, production quota and voluntary production reduction. Which policy is least efficient? Discuss the differences in the benefits to farmers and the cost to the government.
What will be an ideal response?
When measuring economic growth, economists typically focus on per capita real GDP in order to account for variations in the:
a. size of the population b. price level c. quality of goods and services d. both (a) and (b) above
Producers of computer software are plagued with the problem of "pirating", that is, many people copy software legally purchased by others. The industry estimates that for each legal copy of a program, there are two pirated copies in use. The industry wants strict laws for the enforcement of its "intellectual property rights," but enforcement is obviously very difficult. Economists call this
problem a. depletability. b. externality. c. durability. d. nonexcludability.