Evidence in favor the Keynesian model would be that:
a. investment is not sensitive to changes in tax rates.
b. labor supply is inelastic.
c. the aggregate price level is positively correlated with income.
d. all of the above.
e. none of the above.
D
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Net exports of goods and services equal the
A) exports of goods and services divided by the imports of goods and services. B) exports of goods and services plus the imports of goods and services. C) exports of goods and services minus the imports of goods and services. D) imports of goods and services minus the exports of goods and services.
Everything else held constant, an appreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
Under laissez-faire, the allocation of resources among different products depends on
A. consumer preferences. B. production costs. C. Both a and b are correct. D. Neither a nor b is correct.
Expansionary fiscal policy increases the level of aggregate demand through either increases in government ____________ or reductions in taxes.
a. spending b. salaries c. taxation d. involvement