In the basic Keynesian model, an increase in transfer payments:
A. reduces short-run equilibrium output.
B. increases potential output.
C. increases short-run equilibrium output.
D. reduces potential output.
Answer: C
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The slope of the budget line
A. always equals 1. B. equals income divided by price. C. equals the ratio of the prices. D. decreases as we move from left to right.
Indicate which of the following individuals would be included in the labor force as defined by the Census Bureau
A) a teenager looking for a part-time job B) a man waiting for recall from a layoff C) a woman who has accepted a new job but has not yet begun working D) All of the above would be included in the labor force.
The exchange-rate arrangement that emerged from the Bretton Woods conference is often referred to as the:
a. dollar exchange standard. b. euro exchange standard. c. gold exchange standard. d. silver exchange standard. e. flexible exchange rate standard.
If country A had four times the initial level of real GDP per capita of Country B and it was growing at 1.4 percent a year, while real GDP was growing at 2.3 percent in country B, how long would it take before the two countries had the same level of real GDP per capita?