Suppose we have an economy in which G = 100, t = 0.26, Y = 3800, and YN = 4000. Then t rises to 0.28 as the same time as G rises to 1150. The overall impact of this resettling of the fiscal variables is ________ because ________
A) expansionary, the actual deficit rises
B) expansionary, the natural employment deficit falls
C) contractionary, the natural employment deficit falls
D) contractionary, the natural employment deficit rises
E) contractionary, the actual deficit rises
C
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The net international investment position reflects the domestic holding of foreign assets minus foreign holdings of domestic assets
Indicate whether the statement is true or false
Refer to Scenario 1-3. Using marginal analysis terminology, what is another economic term for the incremental cost of producing the last 400 t-shirts?
A) operating cost B) explicit cost C) marginal cost D) Any of the above terms are correct.
Why must a good economic theory use abstraction?
a. It makes theories more complicated and thus more accurate. b. It summarizes, thereby making theories easy for lay people to understand. c. The world is too complex to analyze without it. d. Economics is too unpredictable to analyze without it.
The standard discussion of monetary policy is based on the assumption that:
A. short-term rates will fall when the Fed pushes up long-term interest rates. B. short-term rates will rise when the Fed pushes up long-term interest rates. C. long-term rates will fall when the Fed pushes up short-term interest rates. D. long-term rates will rise when the Fed pushes up short-term interest rates.