Suppose the economy is initially experiencing a short-run recessionary gap. An increase in the size of the budget deficit will
A) increase the size of the recessionary gap.
B) reduce the size of the recessionary gap.
C) lead to an increase in prices with no increase in real GDP.
D) lead to a decrease in prices with an increase in real GDP.
B
You might also like to view...
Comparative advantage is determined by the relative levels of autarky prices
Indicate whether the statement is true or false
If macaroni and cheese is an inferior good, then an increase in
a. the price will cause the demand curve for macaroni and cheese to shift to the left. b. the price will cause the demand curve for macaroni and cheese to shift to the right. c. a consumer's income will cause the demand curve for macaroni and cheese to shift to the left. d. a consumer's income will cause the demand curve for macaroni and cheese to shift to the right.
If the price of good A increases from $15 to $20 per unit and quantity demanded falls from 150 to 100 units, then by using the method of average values, we can calculate the absolute price elasticity of demand to be
A) 2.6. B) 0.75. C) 1.4. D) 2.4.
Which of the following statements is true about individuals and utility?
A. Individuals seek to maximize their income, not utility. B. Individuals will either minimize or maximize utility depending on the situation. C. Individuals rarely try to maximize their utility. D. Individuals seek to maximize utility.