Combinations of goods outside the production possibilities curve
a. are unattainable given society's technology and resources
b. are combinations that have already been consumed
c. go beyond basic necessities
d. result from involuntary unemployment
e. are the result of economic recessions
A
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Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through:
a. expanding and contracting the money supply. b. encouraging business to expand or contract investment. c. regulating net exports. d. decreasing government spending or increasing taxes.
The __________________ traces the flow of money, resources, and goods and services through the economy.
Fill in the blank(s) with the appropriate word(s).
The alternatives of the active versus passive view of stabilization policy are usually expressed as
A. fiscal policy versus monetary policy. B. internal versus external. C. present value versus future value. D. discretion versus rules.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower