According to the Keynesian view, the rapid increase in government spending and large budget deficits in response to the recession of 2008-2009 would
a. slow the recovery process and result in weak long-term growth of real GDP.
b. speed the recovery process and provide the foundation for strong long-term growth of real GDP.
c. stimulate a more rapid recovery, but cause the economy to fall back into a recession in the near future.
d. slow the recovery process, but provide the foundation for rapid long-term growth of real GDP.
B
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Which of the following statements is true?
A) Economics is concerned with money, not choices. B) Economics can be used to predict people's actions. C) Economics does not provide insights into human behavior. D) Economic reasoning tends to reduce the quality of decision making.
Refer to Figure 7-3. What is the value of domestic producer surplus after the imposition of a quota?
A) $10.75 million B) $15.75 million C) $17.25 million D) $27.75 million
If the economy is initially in short-run equilibrium and then experiences a positive demand shock, real GDP will ________ relative to potential GDP and the real interest rate will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Refer to the table below. The perfectly competitive firm has a random demand with a 75 percent chance of being $5 and a 25 percent chance of being $9. What quantity should the firm produce to maximize its expected profit?
The above table summarizes the marginal cost of production at various quantity levels for a perfectly competitive firm.
A) 130 B) 110 C) 100 D) 120