The economy is in a recessionary gap and there is evidence that the economy is in a liquidity trap. In this situation, a Keynesian is likely to advocate the use of __________ policy
A) expansionary fiscal
B) contractionary fiscal
C) expansionary monetary
D) contractionary monetary
A
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The currency adopted by most countries in ________ is referred to as the euro
A) Western Europe B) Europe and Asia C) Southern Europe and Northern Africa D) Eastern Europe
In the absence of financial frictions, ________
A) interest rates for different borrowers move closely together B) all loans in the economy are transacted at a common interest rate C) the level of output is not affected by changes in the real interest rate D) an increase in inflation leads to a decrease in the real interest rate
A shortcoming of national income accounting is that it ignores: a. the depreciation of manufactured capital
b. spending by poor households who are receiving government transfer payments. c. spending on intermediate goods. d. the depletion of natural resources. e. U.S. products that are sold overseas.
Schyler is able to take out a loan for $3,000 for one year at an annual interest rate of 10 percent. After calculating her return to be $200, Schyler will realize she will:
A. lose $100 overall if she takes out the loan. B. make $200 overall if she takes out the loan. C. make $100 overall if she takes out the loan. D. lose $200 overall if she takes out the loan.