Nondiscretionary fiscal policy
A. multiplies declines in aggregate demand.
B. multiplies inflationary growth of aggregate demand.
C. does not require any changes in legislation.
D. includes government expenditures, taxes and monetary policy.
C. does not require any changes in legislation.
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If the entire banking system has total deposits of $4 billion and a reserve requirement of 5 percent, then the maximum possible amount of loans that the banking system can make equals $2 million
a. True b. False Indicate whether the statement is true or false
A major complication with fiscal policy to control aggregate demand is the
a. inability to agree on macroeconomic goals. b. accuracy of modern forecasting models. c. inability to change aggregate demand with fiscal tools. d. constantly changing investment and net exports because of other events.
The command economy predominates in countries like North Korea and Cuba
a. True b. False Indicate whether the statement is true or false
The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $50 million. If GDP, consumption, and government spending remains the same and Alpetra is a closed economy, what is the change in investment?
a. $50 million b. $100 million c. No change d. Cannot be determined from the information given