The tax multiplier is the
A) magnification effect of a change in taxes on aggregate supply.
B) magnification effect of a change in taxes on the national debt.
C) magnification effect of a change in taxes on the budget deficit.
D) magnification effect of a change in taxes on government expenditures.
E) magnification effect of a change in taxes on aggregate demand.
E
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Import Substitution (IS) strategies have been defended on the basis of
a. export pessimism b. the desire to industrialize c. the potential for learning by doing d. the desire to save on foreign exchange e. all of the above
The U.S. government can play an important role in establishing the credibility of anti-inflation policy by
A) demonstrating fiscal responsibility. B) monitoring the Fed. C) conducting fiscal policy. D) all of the above.
When the price of a good is higher than the equilibrium price, a. a shortage will exist
b. buyers desire to purchase more than is produced. c. sellers desire to produce and sell more than buyers wish to purchase. d. quantity demanded exceeds quantity supplied.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions remain the same. b. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions become more positive (or less negative). c. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive). d. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.