Which of the following about fiscal policy is true?
a. The expansionary fiscal policy of the 1980s stimulated aggregate demand and led to high rates of inflation during the latter half of the decade.
b. The restrictive fiscal policy of the 1990s led to sluggish economic growth during the decade.
c. Even though fiscal policy was highly expansionary during the 1980s, the inflation rate fell and remained at relatively low levels.
d. Even though fiscal policy was restrictive during the 1990s, the real growth rate of the economy was strong.
e. Both c and d are true.
E
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The following table provides nominal exchange rates for the U.S. dollar.CountryForeign currency/dollarDollar/foreign currencySwitzerland(franc)1.730.578Brazil(real)1.821.549Based on these data, the nominal exchange rate equals approximately ________ reals per Swiss franc or, equivalently, ________ Swiss francs per real.
A. 3.551; 0.282 B. 0.950; 1.053 C. 0.282; 3.551 D. 1.053; 0.950
The effect on total market demand from the advertising of a specific brand will
A) always be positive. B) always be negative. C) often be positive. D) often be negative.
A technological breakthrough in using photons for computers will increase the productivity of those working with computers a hundredfold. You would expect this breakthrough to shift the
A. labor supply curve up, reducing the quantity of labor demanded at any given real wage. B. labor supply curve down, raising the quantity of labor demanded at any given real wage. C. marginal product of labor curve up and to the right, raising the quantity of labor demanded at any given real wage. D. marginal product of labor curve down and to the left, reducing the quantity of labor demanded at any given real wage.
The output gap can best be described as:
A) the percentage difference between GDP and its potential B) the difference between GDP in the current year compared to the previous year C) the difference between a nation's GDP and that of the nation with the highest GDP D) the difference between GDP and its forecasted level