Expansionary fiscal policy will most likely result in
A) a decrease in the money supply
B) an increase in the marginal propensity to consume
C) an increase in the nominal interest rates
D) a decrease in the level of output
E) a decrease in the price level
Answer: C) an increase in the nominal interest rates
You might also like to view...
The laws of supply and demand force prices to an equilibrium.
Answer the following statement true (T) or false (F)
An increase in the real interest rate would cause an increase in the real demand for money
A) no matter what the change in expected inflation. B) if expected inflation fell by less than the rise in the real interest rate. C) if expected inflation fell by the same amount as the rise in the real interest rate. D) if expected inflation fell by more than the rise in the real interest rate.
One cause of market failure may be the absence of clearly defined property rights
a. True b. False Indicate whether the statement is true or false
The concept that people should pay taxes based on the benefits they receive from government services is called
a. the ability-to-pay principle. b. the benefits principle. c. horizontal equity. d. vertical equity.