The Keynesian analysis of fiscal policy implies that
a. fiscal policy should generally be expansionary except during periods of economic recession.
b. fiscal policy should generally be restrictive except during inflationary booms.
c. the federal budget should be balanced annually except during war.
d. the federal budget should be used to maintain aggregate demand at a level consistent with full employment.
D
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As defined by economists, interest is
a. only the amount earned by productive capital as a resource b. only the amount earned by land as a resource c. only the amount earned by lending money d. both the amount earned by productive capital as a resource and the amount earned by lending money e. both the amount earned by land as a resource and the amount earned by lending money
If a 5 percent decrease in the price of a good produces a 5 percent increase in the quantity demanded, the price elasticity of demand is:
a. perfectly elastic. b. perfectly inelastic. c. elastic. d. inelastic. e. unitary elastic.
The main source of earning profits for banks is:
a. government securities. b. saving accounts. c. reserves. d. loans. e. checking account fees.
Many economists believe that
a. the corporate income tax satisfies the goal of horizontal equity. b. the corporate income tax does not distort the incentives of customers. c. the corporate income tax is more efficient than the personal income tax. d. workers and customers bear much of the burden of the corporate income tax.