In the long-run ISLM model and with everything else held constant, the long-run effect of an expansionary fiscal policy is to ________ real output and ________ the interest rate
A) increase; increase
B) not change; not change
C) increase; not change
D) not change; increase
D
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X-inefficiency refers to the situation in which firms with market power are operating in the upward-sloping segment of their long-run average cost curve
Indicate whether the statement is true or false
To join the EMU, a country must have a public debt below or approaching a reference level of
A) 50 percent of its GDP. B) 10 percent of its GDP. C) 60 percent of its GDP. D) 100 percent of its GDP. E) 5 percent of its GDP.
Empirical studies on velocity and money demand have limited usefulness for monetary policy because they often ignore
A) money supply effects. B) interest rate effects. C) inflation effects. D) lags in monetary policy.
The U.S. Congress passed a stimulus bill in February 2009 to help remove the economy from a recessionary gap. This is an example of the use of
A) expansionary monetary policy. B) contractionary monetary policy. C) contractionary fiscal policy. D) expansionary fiscal policy.