Which of the following is a common criticism of the use of fiscal policy?
A) Fiscal policy is often enacted too quickly, before the market is ready for it.
B) A government borrowing money to finance fiscal policy can crowd out investments.
C) Expansionary fiscal policy can help pull an economy out of a recession.
D) If no fiscal policy is used, the economy will never be able to correct itself, even partially.
Ans: B) A government borrowing money to finance fiscal policy can crowd out investments.
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Economists who believe that market concentration is not harmful to a country's economic well being
a. favor laissez-faire government policies b. think that markets should be regulated c. think that the government should own those monopolies d. like the idea of price controls e. are nonexistent
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. The GDP Price Index rises and net nonreserve
international borrowing/lending balance becomes more positive (or less negative). b. The GDP Price Index rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The GDP Price Index falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. The GDP Price Index and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The ordered pair that represents the origin on a graph is
a. (1, 1). b. (0, 0). c. (-1, -1). d. ( ).
The period in which at least one input is fixed in quantity is the
A. Production run. B. Long run. C. Short run. D. Investment decision.