The inability of Congress to pass a stimulus package after September 11, 2001, could be used as an argument for
a. activist fiscal policy.
b. activist monetary policy.
c. expansionary fiscal policy.
d. contractionary monetary policy.
b
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
A $1.5 trillion increase in investment leads equilibrium expenditure to increase from $7.0 trillion to $10.5 trillion. In this case, the expenditure multiplier is
A) 7.00. B) 4.67. C) 2.33. D) 1.50. E) 10.5.
If the moral hazard problem in automobile driving were to be eliminated, the marginal cost of driving would be
A) lowered enough to pull the amount of driving back down to the efficient level. B) lowered enough to raise the amount of driving back up to the efficient level. C) raised enough to pull the amount of driving back down to the efficient level. D) raised enough to raise the amount of driving back up to the efficient level. E) lowered back down to the efficient level, relieving the stress on market forces.
Poverty is defined in two ways: the absolute concept of poverty and the relative concept of poverty
a. True b. False Indicate whether the statement is true or false