Which would most likely shift the aggregate supply curve? A change in:
A. government spending.
B. excess capacity in business.
C. prices of imported resources.
D. consumer expectations.
Answer: C
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If you were a Keynesian economist, what policies would you likely suggest to respond to a recession?
a. moderate tax cuts and increases in government spending b. cuts in government spending and moderate tax increases c. tax refunds and deep cuts to social programs d. government investments in defense and anti-inflation measures
An example of an international policy externality is
A) the locomotive effect. B) the liquidity effect. C) the monetary effect. D) sterilization.
A furniture maker used to buy its wood, but has now bought the lumber company. How does this impact GDP?
A) It reduces it. B) It does not change. C) It increases it. D) We cannot tell.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period and real GDP remain the same. b. There is not enough information to determine what happens to these two macroeconomic variables. c. The quantity of real loanable funds per time period falls, and real GDP falls. d. The quantity of real loanable funds per time period rises, and real GDP falls. e. The quantity of real loanable funds per time period falls, and real GDP rises.