Refer to the figure above. The economy is at equilibrium at point B. What would expansionary fiscal policy do?
a. Move the economy from point B upward along AD2
b. Move the economy from point B towards point C
c. Move the economy from point B downward along AD2
d. Move the economy from point B towards point A
Answer: d. Move the economy from point B towards point A
You might also like to view...
Game theory is most useful for analyzing
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.
Which of the following would have the greatest positive impact on a country's domestic economy?
A) An increase in spending on imports from other countries. B) An increase in spending by foreigners on the country's exports. C) A decrease in the confidence of foreign investors in the country's economy. D) A decrease in the incomes of consumers in foreign countries.
The gambler's fallacy suggests that what happened in the past will influence the present. This is most likely true in which of the following situations?
A) flipping cards from a single deck B) tossing a fair coin C) the quality of play of a baseball team D) horse racing
Suppose that your college offers you two payment plans for your last two years of college. You may either pay tuition of $20,000 per year at the beginning of each of the next two years, or pay just $38,000 before the start of freshman year
What would the interest rate have to be for you to be indifferent between these two deals? Explain.