The increase in spending that occurs because the demand for investment goods increases when the price level falls is known as the:
A. interest rate effect.
B. international trade effect.
C. price effect.
D. wealth effect.
Answer: A
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The share of net public debt owed to foreign residents today is close to
A) 80 percent. B) 10 percent. C) 100 percent. D) 50 percent.
In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to
________, everything else held constant. A) up; rise B) up; fall C) down; rise D) down; fall
When there is excess aggregate demand, the appropriate fiscal policy would be for the government to
A. Increase the public debt. B. Make budget deficits larger. C. Make budget surpluses larger. D. Make budget surpluses smaller.
The condition where firms do not want to sell as many as consumers want to buy is called
A. a market collapse. B. a surplus. C. an equilibrium. D. a shortage.