When a government reduces its deficits by increasing taxes, in the short run,
A) output returns to potential.
B) output increases.
C) interest rate is higher.
D) IS curve shifts inward to the left.
A
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Autarky refers to
A) a situation in which there is no trade. B) the equilibrium a nation reaches after trade begins. C) a situation in which nations trade goods and services. D) the location on a consumption possibilities curve.
The Keynesian mechanism through which monetary policy affects the price level, real GDP, and employment depends on the impact of the:
a. interest rate on savings. b. inflation on investment. c. interest rate on investment. d. interest rate on bond prices.
The portion of a resource's earnings greater than the amount required to keep the resource in its present use is called:
a. the price of the resource. b. the opportunity cost of the resource. c. economic rent. d. income.
Increasing the reserve requirement ratio is
A) a contractionary policy because it lowers the amount of total reserves in the banking system. B) a contractionary policy because it lowers the amount of excess reserves in the banking system. C) an expansionary policy because it raises the amount of excess reserves in the banking system. D) an expansionary policy because it raises the amount of required reserves in the banking system.