In the short run, a restrictive fiscal policy will cause aggregate demand, output, and the price level to change in which of the following ways?
A) Decrease/Decrease/Decrease
B) Decrease/Increase/Increase
C) Increase/Decrease/Decrease
D) Increase/Decrease/Increase
E) No change/No change/No change
Ans: A) Decrease/Decrease/Decrease
You might also like to view...
Which of the following would be counted as investment when calculating gross domestic product?
a) the purchase of a used computer by an auto manufacturer b) the purchase of a share of IBM stock by an employee c) the construction of a new house d) the construction of roads by the government e) the profit earned when selling shares of stock
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
The Ricardian equivalence theorem states that
A. the effects of an increase in government spending are equivalent to the effects of an increase in the money supply. B. an increase in government spending financed by higher taxes has no effect on aggregate demand. C. government spending financed by taxes is equivalent to government spending financed by borrowing. D. spending on national defense is a direct expenditure offset.
As you consume more of a particular commodity, your total level of utility derived from that consumption will
A) increase at an increasing rate. B) increase at a decreasing rate. C) increase at a constant rate. D) remain constant.