When successfully implemented, expansionary fiscal policy will cause
A. an upward movement along the aggregate demand curve.
B. a leftward shift of the aggregate demand curve.
C. a downward movement along the aggregate demand curve.
D. a rightward shift of the aggregate demand curve.
Answer: D
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If bank reserves are 200, the public holds 400 in currency, and the desired reserve/deposit ratio is 0.20, the deposits are ________ and the money supply is ________.
A. 400; 800 B. 200; 600 C. 600; 1,000 D. 1,000; 1,400
To compute GDP:
A) simply sum the number of final goods and services. B) sum the cost of producing final goods and services. C) use a weighted average by a survey regarding how much people value different goods and services. D) sum the market values of final goods and services.
In the long run,
a. continuing budget surpluses cause interest rates to fall, thereby stimulating investment spending b. any deviation from a balanced budget will plunge the economy into recession c. there can be no economic growth unless the government's budget is in surplus d. there can be no economic growth unless the government's budget is balanced e. government spending must increase as a fraction of GDP
Which of the following types of unemployment can the classical model not explain?
a. Structural unemployment b. Cyclical unemployment c. Seasonal unemployment d. Frictional unemployment e. Temporary unemployment