What are the key differences between how we illustrate a contractionary fiscal policy in the basic aggregate demand and aggregate supply model and in the dynamic aggregate demand and aggregate supply model?
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What will be an ideal response?
In the basic aggregate demand and aggregate supply model, contractionary fiscal policy is illustrated by a leftward shift of the aggregate demand curve, with the short-run aggregate supply curve and long-run aggregate supply curve remaining stationary. The dynamic aggregate demand and aggregate supply model takes into account the economy experiencing continuing inflation from year to year and the economy experiencing long-run growth. In the dynamic model, contractionary fiscal policy is illustrated by a rightward shift of the aggregate demand curve which is less than the rightward shifts of the short-run aggregate supply curve and the long-run aggregate supply curve.
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Product differences are ___________ physical.
Fill in the blank(s) with the appropriate word(s).
Refer to the data. The marginal product of the fourth worker:
Answer the question on the basis of the following information:
A. is 5.
B. is 7.
C. is 7 1 / 2 .
D. cannot be calculated from the information given.
The relationship between the government deficit and the change in the monetary base is
A. deficit equals change in government debt outstanding plus change in monetary base. B. deficit equals change in government debt held by the public plus change in monetary base. C. deficit equals change in government debt outstanding minus change in monetary base. D. deficit equals change in government debt held by the public minus change in monetary base.
Increasing the reserve requirement reduces the money supply.
Answer the following statement true (T) or false (F)