Stabilizing the economy by fiscal policy need not imply a tendency toward “big government.”
Answer the following statement true (T) or false (F)
True
You might also like to view...
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
If the United States imports low-cost goods produced in low-wage countries instead of producing the goods domestically,
a. the United States will incur a net loss of total jobs. b. the United States will gain, and domestic resources will be employed more productively. c. dollars that leave the United States will not return to buy goods produced by high-wage American workers. d. the availability of consumption goods in the United States will be reduced.
Which of the following is most likely to increase the incentive to invest, produce, and employ others?
a. an increase in government expenditures to provide subsidies for large banks that made bad investment decisions b. an increase in government expenditures that changes the composition of aggregate demand c. a reduction in tax rates d. an increase in payments to unemployed workers financed by borrowing
Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a