Expansionary fiscal policy in response to a negative real shock:
A. will only increase real growth and inflation a little.
B. might increase inflation a little but will increase real growth a lot.
C. might increase real growth a little but will increase inflation a lot.
D. will increase both real growth and inflation a lot
Answer: C. might increase real growth a little but will increase inflation a lot.
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If government purchases are $400 million, taxes are $700 million, and transfers are $200 million, which of the following is true?
A) Public saving is $100 million. B) The budget deficit is $100 million. C) The budget deficit is $500 million. D) Public saving is $500 million.
The net amount of international reserves that move between governments to finance international transactions is called the ________ balance
A) capital account B) current account C) trade D) official reserve transactions
The requirement for a double coincidence of wants occurs when
A) there is inflation. B) there is deflation. C) a system of barter is used. D) the medium of exchange is liquid.
The "opportunity cost" of an action is
What will be an ideal response?