If the shifts in AD that will result from policy changes are fully and accurately anticipated, a decrease in government purchases or an increase in taxes would result in which of the following in the short run?
a. a higher level of real output and a higher price level
b. a higher level of real output but no change in the price level
c. a higher price level and a reduced level of real output
d. none of the above.
d
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A highway is a public good _____
a. if it is free b. if it is publicly run c. if it is uncongested d. if drivers cannot be excluded from driving on it
We should expect to see home construction activity decrease when interest rates increase
a. True b. False Indicate whether the statement is true or false
Which of the following is the best definition of gross domestic product (GDP)?
Other things the same, a decrease in the price level motivates people to hold
a. less money, so they lend less, and the interest rate rises. b. less money, so they lend more, and the interest rate falls. c. more money, so they lend more, and the interest rate rises. d. more money, so they lend less, and the interest rate falls.