The ________ of the U.S. economy during World War II, with its vast defense spending, ________ of Keynesian macroeconomics
A) continued stagnation, established the supremacy
B) continued stagnation, was the demise
C) rapid recovery, established the supremacy
D) rapid recovery, was the demise
C
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Investment and saving decisions are assumed by economists to depend on the ________ interest rate
A) expected nominal B) nominal C) expected real D) real
Short-run cost functions are estimated using
A) time-series regression analysis. B) cross-sectional regression analysis. C) nominal cost data. D) present value cost data.
Lower transaction costs are a benefit of fixed exchange rates. Therefore, relative prices in two trading nations linked by fixed exchange rates should:
A) experience more price divergence. B) experience more price convergence. C) have less arbitrage and more speculation. D) have lower costs of production.
Starting from long-run equilibrium, the long-run impact of a war that raises government purchases, compared to the original equilibrium, is:
A. lower inflation and lower output. B. higher inflation and the same output. C. lower inflation and the same output. D. higher inflation and higher output.