According to Keynesian theory, a decrease in government expenditures would be a proper fiscal policy during
A. an inflationary gap.
B. a recessionary gap.
C. a natural disaster.
D. none of these.
Answer: A
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Refer to the figure below. The equilibrium price is ________, and the equilibrium quantity is ________. 
A. $30; 15 B. $35; 20 C. $25; 5 D. $25; 20
The Benefits Principle
What will be an ideal response?
In most major countries, including Japan, Canada, and the US, fluctuations in consumption are
a) countercyclical and more volatile than GDP b) countercyclical and less volatile than GDP c) procyclical and more volatile than GDP d) procyclical and less volatile than GDP e) unrelated to fluctuations in GDP
The financing of U.S. import transactions, ceteris paribus
A) reduces U.S. interest rates. B) increases the amount of foreign currency held by the Fed. C) increases U.S. GDP. D) decreases the amount of foreign currency held by U.S. banks.