The actual budget deficit of the federal government in 2009 was about $1.4 trillion. On the basis of this information, it:
A. can be concluded that the economy was faced with serious inflation in 2009.
B. cannot be determined whether the government engaged in expansionary or contractionary
fiscal policy in 2009.
C. can be concluded that fiscal policy was contractionary in 2009.
D. can be concluded that fiscal policy was expansionary in 2009.
B. cannot be determined whether the government engaged in expansionary or contractionary
fiscal policy in 2009.
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
An effective program used to fight transient poverty is:
A. unemployment insurance. B. health insurance. C. job training. D. All of these are effective at fighting transient poverty.
Autonomous expenditure is spending that is:
A. depends on the level of income in the economy. B. that is determined by the government. C. not sensitive to the level of income in the economy. D. what is spent when income changes in the economy.
Why do economists measure responsiveness of demand to price in percentage changes rather than in absolute changes?