As a result of the increased deficit associated with discretionary fiscal policy, _____
a. both the interest rate and real output fall
b. both the interest rate and nominal output rise
c. the interest rate falls and real output rises
d. the interest rate rises and real output falls
e. nominal output rises, real output falls, and the interest rate rises
b
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________ adopts the view that aggregate fluctuations are a natural consequence of an expanding economy
A) The new macroeconomics B) The Okun Gap C) Keynesian economics D) The Lucas Wedge E) Classical macroeconomics
In the above figure, the long-run equilibrium price level is
A) 150. B) 130. C) 110. D) not displayed.
Which of the following is not a legal barrier to entry in a monopolized market?
a. A patent. b. An exclusive franchise. c. Decreasing average cost. d. An exclusive license.
According to the new classical view, if people appropriately realize that an increase in government debt implies higher future taxes, they will
a. save less since the substitution of debt for taxes makes them wealthier. b. increase their consumption since the substitution of debt for taxes makes them wealthier. c. save more now to meet the future tax liability implied by the increase in debt. d. alter neither their saving nor their consumption rate.