Suppose that a bond-financed deficit shifts the IS curve to the right, taking IS-LM equilibrium "northeast" from point A to point B
If government bonds are considered net wealth by the public sector, then by the portfolio theory of asset-holding there is an excess ________ money at point B because the LM curve has shifted ________ with increased wealth, and thus the fiscal policy turns out to be ________ expansionary than without the wealth effect. A) demand for, downward, more
B) demand for, downward, less
C) demand for, upward, less
D) supply of, downward, more
E) supply of, upward, more
C
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Which of the following is most likely to close a recessionary gap in the economy?
a. A decrease in the expenditure on infrastructure b. An increase in the income tax rate c. An increase in the rate of foreign exchange d. A decrease in money supply e. An increase in the compensation for government employees
Fred's demand schedule for movie DVDs is as follows: At $30, he would buy 1; at $25, he would buy two; at $15, he would buy 3; and at $10, he would buy 4 . If the price of movie DVDs equals $25, the consumer surplus Fred receives from purchasing movie DVDs would be: a. zero. b. $5
c. $25. d. $55.
If the value of an economy's imports exceeds the value of that economy's exports, then net exports is a negative number
a. True b. False Indicate whether the statement is true or false
Which of the following could be the price elasticity of demand for a good for which an increase in price would decrease revenue?
a. 0.6 b. 0.9 c. 1 d. 2.6