Which of the following would be most likely to induce Congress and the president to conduct expansionary fiscal policy? A significant
A) increase in net exports. B) decrease in investment spending.
C) decrease in oil prices. D) increase in consumption spending.
B
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According to real business cycle theorists, the tendency of money to lead output may be due to
A) government spending shocks, which lead to later changes in economic activity, and the tendency for bank loans to expand in advance of real activity that will occur at a later date. B) the tendency for bank loans to expand in advance of real activity that will occur at a later date and the Federal Reserve's use of all available information in trying to stabilize the price level. C) the Federal Reserve's use of all available information in trying to stabilize the price level and the Federal Reserve's use of all available information in trying to stabilize the level of economic activity. D) the Federal Reserve's use of all available information in trying to stabilize the level of economic activity and government spending shocks, which lead to later changes in economic activity.
Aggregate demand is the sum of total domestic spending by the private sector.
Answer the following statement true (T) or false (F)
The precautionary motive for holding money reflects the behavior of people who hold money
a. instead of near money b. to transact purchases they expect to make c. as insurance against unexpected needs d. to speculate in the stock market e. to take advantage of anticipated or hoped for changes in interest rates
According to the long-run Phillips curve, in the long run monetary policy influences
a. inflation but not the unemployment rate; this is consistent with classical theory. b. inflation but not the unemployment rate; this is inconsistent with classical theory. c. the unemployment rate but not inflation; this is consistent with classical theory. d. the unemployment rate but not inflation; this is inconsistent with classical theory.