Expansionary fiscal policy uses ________ government spending and ________ taxes to increase aggregate economic activity
A) lower; lower B) higher; lower C) higher; higher D) lower; higher
B
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In the short run, a change in the nominal exchange rate brings an equivalent change in the real exchange rate
Indicate whether the statement is true or false
The labor force includes:
a. employed workers but excludes persons who are officially unemployed. b. employed workers and persons who are officially unemployed. c. full-time workers but excludes part-time workers. d. permanent employees but excludes temporary employees.
Capital flight increases a country's interest rate. This increase in the interest rate makes net capital outflow lower than it would be had the interest rate stayed the same
a. True b. False Indicate whether the statement is true or false
The "naïve" Keynesian model is unrealistic because it
A. Does not take into account probable changes in the price level as the economy approaches full employment. B. Assumes that AS is upward sloping when it is more probably horizontal. C. Assumes that the price level decreases as AD increases. D. Does not account for changes in output due to the multiplier.