Government stabilization policy
a. cannot influence investment spending.
b. can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable.
c. can stimulate aggregate demand, but investment spending will not be affected.
d. can stimulate aggregate demand, but only in the long run.
b
You might also like to view...
Which of the following explains why many European countries have unemployment rates that are higher than in the United States?
A) Technological change occurs at a faster rate in Europe, so structural unemployment is higher in Europe. B) European countries offer higher unemployment benefits than the United States. C) The minimum wage in Europe is lower than it is in the United States. D) Firms in European countries offer employees higher wages and higher benefits than do firms in the United States.
What is the substitution effect of a wage increase? What is the income effect of a wage increase? Explain under what conditions the labor supply curve will be upward sloping and when it will be downward sloping
What will be an ideal response?
An individual has a comparative advantage in production if that individual: a. can produce at the highest opportunity cost. b. is more self-sufficient than others
c. can produce at the lowest opportunity cost. d. all of the above
A dedicated professor loves being in the classroom and would teach for $70,000 per year, but he is actually paid $80,000 per year. This individual
A) receives economic rent of $150,000. B) has an opportunity cost of $80,000. C) has an opportunity cost of $70,000. D) receives economic rent of $10,000.