In the long run,
a. continuing budget surpluses cause interest rates to fall, thereby stimulating investment spending
b. any deviation from a balanced budget will plunge the economy into recession
c. there can be no economic growth unless the government's budget is in surplus
d. there can be no economic growth unless the government's budget is balanced
e. government spending must increase as a fraction of GDP
A
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A fiscal stimulus works to close a recessionary gap by shifting the
A) AD curve leftward. B) AS curve leftward. C) AD curve leftward and AS curve leftward. D) AD curve rightward. E) potential GDP line leftward.
Which of the following is explained by the price elasticity of demand for a product?
a. The effect of changes in price on the supply of the product b. The effect of changes in quantity on the supply of the product c. The effect of changes in quantity on the price of the product d. The effect of changes in price on the quantity demanded of the product e. The effect of changes in price on the quantity supplied of the product
If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?
a. $2.72 billion. b. $17 billion. c. $36.8 billion. d. $43 billion.
A price ceiling set below the equilibrium price will
A) clear the market for the good. B) result in a shortage of the good. C) result in a surplus of the good. D) induce new firms to enter the industry.