Other things constant, what is the outcome of expansionary fiscal policies on employment, inflation, real output, and deficits in the short-run?
The expansionary policy will lead to an increase in AD which will lead to an increase in real output, a decrease in unemployment, and an increase in inflation. Ceteris paribus, the increase in government purchases and/or decrease in taxes will lead to an increase in the deficit.
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Evaluate the pros and cons of State-Owned Enterprises
What will be an ideal response?
Explain the Keynesian theory of money demand. What motives did Keynes think determined money demand? What are the two reasons why Keynes thought velocity could NOT be treated as a constant?
What will be an ideal response?
As noted in the text, the major Japanese auto manufacturers agreed to "voluntary" import restrictions that reduced the number of cars they could ship to the U.S. market in the 1980s
One of the key outcomes from this policy is that the Japanese manufacturers were able to: A) focus on more profitable auto markets in other countries. B) raise their prices of autos in the U.S. market and capture higher profit margins on the imported cars. C) cut their costs by more than the import tariff, so profit per auto increased. D) all of the above
When an individual firm in a competitive market increases its production, it is likely that the market price will fall
a. True b. False Indicate whether the statement is true or false