In the traditional Keynesian model, an increase in government spending
A) causes the C + I + G + X line to shift upward by the full amount of the increase in government spending.
B) causes the C + I + G + X line to shift upward by an amount less than the increase in government spending.
C) causes the C + I + G + X line to shift upward by more than the increase in government spending.
D) causes no change in the C + I + G + X line.
A
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On the modern Phillips curve, the initial impact of an increase in the world price of steel is shown by ________
A) an upward movement along the Phillips curve to a higher inflation rate B) an upward shift of the Phillips curve leading to higher inflation rates for any unemployment rate C) a downward shift of the Phillips curve leading to lower inflation rates for any unemployment rate D) a downward movement along the Phillips curve to higher unemployment rates E) none of the above
In the absence of government
A) public goods are likely to be overprovided. B) market failure is less likely to occur. C) public goods are likely to be underprovided. D) the free-rider problem is more likely to occur.
When the U.S. price level falls, the open economy effect indicates that
A. U.S. residents will move away from domestic goods and buy more foreign goods. B. U.S. imports will rise. C. U.S. exports will increase. D. foreigners will buy fewer U.S. goods.
When a direct expenditure offset occurs with the implementation of an expansionary fiscal policy,
A. the stimulative effect will be more than expected. B. the fiscal policy will not be discretionary. C. the time lags associated with the implementation of fiscal policy will shorten. D. the stimulative effect will be less than expected.