Which of the following is not a weakness of fiscal policy?
What will be an ideal response?
Fiscal policy works only during periods of stagflation.
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Classical economists reject the laissez-faire theory that the economy would self correct to full employment without government interference
a. True b. False Indicate whether the statement is true or false
In Canada, when new demand deposits are created through loans made to Canadians who borrow in order to invest in Canada
a. the Canadian money supply contracts b. excess reserves in Canadian banks are destroyed c. the money supply in Canada remains unchanged but the interest rate decreases favoring the Canadian investor d. the money supply in Canada expands e. the Canadian legal reserve requirement declines
Which of the following is used to measure directly the average standard of living across countries?
A. Real GDP. B. Nominal GDP. C. Purchasing power parity. D. GDP per person.
The best weather in a decade has given Australia a bumper wheat crop. Australia is a small open economy. Based on this information alone, you would expect that
A. the current account would decrease. B. the current account would increase. C. desired investment would increase. D. desired investment would decrease.