Discretionary policy deficits are associated with:
a. increases in national saving.
b. higher prices
c. lower outputs.
d. lower interest rates.
e. raising taxes.
b
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When a person holds money, they give up
A) the pleasure associated with spending money. B) the pleasure associated with saving money. C) the interest that could have been earned if the money had been changed into an interest-bearing asset. D) nothing, since the person can always use the money to buy goods or services or interest-bearing assets.
A Texas oil company extracts petroleum and sells it to a refinery for $1,000 . After processing, the refinery sells the gasoline to a wholesaler for $1,500, who then sells it to a gas station for $1,700 . The gas station sells it to customers for $2,500 . In these transactions, how much has been added to GDP?
a. $1,000 b. $1,500 c. $1,700 d. $2,500 e. $6,700
Other things the same, when the interest rate rises
What will be an ideal response?
Discuss the major differences between classical and Keynesian economists. Be sure to explain how they differ with regard to how quickly equilibrium is restored in the economy as well as what role they see for government action in restoring equilibrium.
What will be an ideal response?