If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point:
A. A
B. It is likely to be unaffected and stay at point B
C. C
D. D
A. A
You might also like to view...
A compensated demand curve contains no
a. income effects. b. substitution effects. c. price elasticity. d. income compensation.
Which of the following decreases the demand for nominal money?
A) a decrease in the nominal interest rate B) an increase in real GDP C) an increase in the quantity of money D) a decrease in the price level
Which statement is true?
A. M1 is money, but not M2. B. M2 is money, but not M1. C. Both M1 and M2 are money. D. Neither M1 nor M2 is money.
When the Federal Reserve increases interest rates, investment spending ________ and GDP ________.
A. increases; decreases B. increases; increases C. decreases; decreases D. decreases; increases