According the traditional Keynesian approach, an increase in government spending is effective in raising real Gross Domestic Product (GDP) if
A) the price level is fixed.
B) the price level is flexible.
C) the price level does not exist.
D) Ricardian equivalence occurs, regardless of the price level.
Answer: A) the price level is fixed.
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A merger between firms at different stages of production of a good
A) was made illegal by the Sherman Act. B) was made legal by the Clayton Act. C) is a vertical merger. D) is a horizontal merger.
We would expect unions to have a more difficult time negotiating higher wages for their members when
A) labor represents a small portion of total costs. B) the product produced makes up a small portion of families' budgets. C) the product produced has several close substitutes. D) there are not good substitutes for labor in the production process.
Eating a bag of sweets gives Rory 25 utils of satisfaction. How many additional utils would you expect Rory would get from eating a second bag of sweets?
(a) 25 utils. (b) Less than 25 utils. (c) More than 25 utils. (d) 50 utils.
The Fed would use a reverse repo when they:
A. forecast a permanent increase in the demand for monetary base. B. forecast a permanent decrease in the demand for monetary base. C. want to temporarily increase the monetary base. D. want to temporarily decrease the monetary base.