Which of the following about fiscal policy is true?
a. Modern forecasting methods make it relatively easy to time fiscal policy changes in a manner that will help stabilize the economy.
b. Legislative action is necessary if automatic stabilizers are going to smooth the ups and downs of the business cycle.
c. Proper timing of changes in discretionary fiscal policy is both crucially important and difficult to achieve.
d. Both the crowding-out and new classical theories indicate that expansionary fiscal policy will exert a powerful impact on aggregate demand.
C
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Refer to Scenario 17.1. If the threshold educational level y* is set at 10,
A) only individuals in Group A will attain it. B) only individuals in Group B will attain it. C) individuals in both groups will attain it. D) no individuals will attain it. E) some fraction of individuals in each group will attain it.
A bank can decrease the degree of moral hazard if it
a. Monitors the borrowers behaviors b. Placing covenants on the loan c. Both of the above d. None of the above
An increasing cost industry is one in which per unit cost increases as output expands in the long run
a. True b. False
The interest rate will _____ and the quantity of loanable funds invested will _____ when the government decreases the budget deficit
Fill in the blank(s) with correct word