Figure 11-2
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Which graph in Figure 11-2 best reflects a Keynesian view of the impact of a $500-per-person tax cut?
A. 1
B. 2
C. 3
D. 4
Answer: B
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In the accelerator theory the
A) smaller the desired capital-output ratio the larger will be net investment. B) smaller the desired capital-output ratio the larger will be replacement investment. C) larger the desired capital-output ratio the larger will be net investment. D) larger the desired capital-output ratio the smaller will be replacement investment.
With a contractionary monetary policy, as the output gap increases, the response of the central bank will tend to cause net capital outflows to ________ and cause the nominal exchange rate to ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
The value of the absolute price elasticity of demand for good X is 3. The absolute price elasticity for good Y is 2. Which good's quantity demanded is less responsive to a change in price?
A) Good X B) Good Y C) They are equally responsive. D) Not enough information is given.
_____ are elements of fiscal policy that automatically change in value as national income changes
a. Statistical discrepancies b. Exchange rates c. Budget deficits d. Automatic stabilizers e. Supply-side shocks