The aggregate expenditure in an open economy is defined as:
A) E = C + I + G.
B) E = C + I + G + X.
C) E = C × I × G × X - M.
D) E = C + I + G + X - M.
D
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When he was chairman of the Fed, Paul Volcker faced an economy with significant stagflation which was a result of oil shocks. Volcker was determined to bring the inflation rate down, which essentially acted like a decrease in the inflation target
In this sense, Volcker's action caused ________ and caused inflation to decrease and ________. A) the AD curve to shift to the left; real GDP to increase. B) the AD curve to shift to the left; real GDP to decrease. C) the AS curve to shift to the right; real GDP to increase. D) the AS curve to shift to the right; real GDP to decrease.
An example of positive analysis is studying
a. how market forces produce equilibrium. b. whether equilibrium outcomes are fair. c. whether equilibrium outcomes are socially desirable. d. if income distributions are fair.
A set of strategies in which no player can improve his or her payoff by changing his or her own action is called a:
A. framing strategy. B. dominant strategy. C. Vickrey position. D. Nash equilibrium.
According to Keynesian theory, a decrease in government expenditures would be a proper fiscal policy during
A. an inflationary gap. B. a recessionary gap. C. a natural disaster. D. none of these.