"Expansionary fiscal policy is always 100 percent effective when the short-run aggregate supply curve is horizontal." Is this statement TRUE?
A) yes, because theoretically nothing else can offset the effects of fiscal policy
B) yes, when the long-run aggregate supply curve is horizontal too
C) no, because crowding out could take place
D) no, because the increased spending may cause the price level to increase
C
You might also like to view...
In the extended classical model, an unexpected decrease in aggregate demand would cause unanticipated inflation to be ________ and cyclical unemployment to be ________
A) positive; negative B) positive; positive C) negative; negative D) negative; positive
Which of the following is true?
a. Borrowers take bigger risks with their money than they would with other peoples' money b. Borrowers take bigger risks with other peoples' money than they would with their own c. Borrowers take big risks on investments regardless of whether it is their own money or not d. Borrowers should not be investing at all
If a production possibilities curve (PPC) has capital on the vertical axis and consumer goods on the horizontal axis, which of the following is true?
a. Greater emphasis on the production of consumer goods today leads to greater outward shifts in the PPC, thus increasing the wealth of people in the future. b. Greater emphasis on the production of capital today leads to greater outward shifts in the PPC, thus increasing the wealth of people in the future. c. There is a tradeoff between emphasizing the production of capital today to benefit people today versus emphasizing the production of consumer goods today that will generate benefits in the future. d. Greater emphasis on the production of capital today leads to future inward shifts in the PPC, thus decreasing the wealth of people in the future.
A share of stock is best defined as a
A. fixed-income security. B. share of ownership in a company. C. nontransferable loan backed by real estate. D. transferable loan backed by the assets of the company.