In the Activists' Paradise, to increase real GDP without affecting the interest rate, it is necessary to change
A) only fiscal policy and shift the IS curve.
B) only monetary policy and shift the LM curve.
C) fiscal and monetary policies and shift both IS and LM.
D) more policy instruments than policymakers are actually able to manipulate.
C
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According to the Keynesian model, the optimal fiscal policy is to
a. increase cyclical but not structural deficits during a recession. b. reduce cyclical and structural deficits during a recession. c. increase structural deficits during an recession. d. maintain a balanced budget in case of national emergency.
The impact of fiscal policy is
A) magnified because of crowding out and weakened because of crowding in. B) magnified because of crowding in and weakened because of crowding out. C) magnified because of crowding out and crowding in. D) weakened because of crowding out and crowding in.
Which of the following would be a macroeconomic question?
A. How have the retirement benefits in the auto industry changed over time? B. How has inflation increased over time? C. How has the price of gold increased over time? D. How has the number of commercial airline flights decreased over time?
If the population increases, the market demand for most products will:
A. not change. B. decrease. C. increase. D. depend on supply.