In 2009 President Obama and Congress increased government spending. Some economists thought this increase would have little effect on output. Which of the following would make the effect of an increase in government expenditures on aggregate demand smaller?
a. the interest rate falls and aggregate supply is relatively flat
b. the interest rate falls and aggregate supply is relatively steep
c. the interest rate rises and aggregate supply is relatively flat
d. the interest rate rises and aggregate supply is relatively steep
d
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Debt service is the amount:
A. of time and energy banks spend creating loans. B. of interest payments that need to be paid over the life of a loan. C. the nation is in debt, expressed as a percent of GDP. D. that consumers have to pay for their debts.
To maximize its profit, a monopolistically competitive firm produces at the output level at which
a. its price elasticity of demand equals one. b. MR = MC. c. its D curve is tangent to its ATC curve. d. MR = AVC.
Bank accounts and bonds are examples of money-fixed assets.
Answer the following statement true (T) or false (F)
Policies aimed at reducing the natural rate of unemployment are referred to as
a. stabilization policies. b. structural policies. c. macroeconomic policies. d. labor policies.