To the extent that a direct expenditure offset results from an expansionary fiscal policy,
A) the fiscal policy will not be discretionary.
B) the time lags associated with the implementation of fiscal policy will shorten.
C) the stimulative effect will be less than anticipated.
D) the stimulative effect will be more than anticipated.
C
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A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.07 in the second year. What dollar wage must be paid in the second year?
A. $10.90 B. $10.70 C. $11.02 D. $10.30
Perfectly inelastic demand curves are vertical.
Answer the following statement true (T) or false (F)
Many people buy fire insurance when they are not required to do so. What does this tell you about their risk preferences?
What will be an ideal response?
Which of the following is a component of aggregate demand?
A. Income B. Taxes C. Consumption D. Transfer payments