A fiscal policy that increases government spending or cuts taxes is most appropriate when the economy is in:
A. a recessionary gap.
B. a long-run equilibrium
C. a short-run equilibrium.
D. an inflationary gap.
Answer: A
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Suppose Dunkin' Donuts buys coffee beans from a wholesaler for $1. They package the beans up and sell them as their own "Dunkin' Donut" beans for $10 at their store. How much value is added to the economy?
A) $10 B) $11 C) $13 D) $15
Which of the following is a final good?
A) the memory chips in your new smart phone B) a share of IBM stock C) flour purchased at the store to bake cookies D) flour used by the bakery to bake cookies
Which of the following statements comparing the European System of Central Banks and the Federal Reserve System is TRUE?
A) The budgets of the Federal Reserve Banks are controlled by the Board of Governors, while the National Central Banks control their own budgets and the budget of the European Central Bank. B) The European Central Bank has similar power over the National Central Banks when compared to the level of power the Board of Governors has over the Federal Reserve Banks. C) Just like the Federal Reserve System, monetary operations are centralized in the European System of Central Banks with the European Central Bank. D) The European Central Bank's involvement in supervision and regulation of financial institutions is comparable to the Board of Governors' involvement.
The demand curve for a typical good has
a. a negative slope because some consumers switch to other goods as the price of the good rises. b. a negative slope because the supply of the good rises as demand rises. c. a negative slope because the good has less "snob appeal" as its price falls. d. an inverse slope because as the price goes up, the good has more profitability. e. a positive slope because price is a clear indicator of need.