When saving is negative, the value of the marginal propensity to save is negative
Indicate whether the statement is true or false
F
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
If Happy Avocados, a ready-made guacamole manufacturer, purchases an avocado farm, this is an example of ________.
A) outsourcing B) backward integration C) divestiture D) forward integration
How do the fluctuations in the exchange rate influence the domestic price level?
What will be an ideal response?
Suppose an elected official wishes to introduce a new government program. Under a PAYGO rule, this new program would be adopted only if
A) the budget deficit is reduced by the same amount as the costs of the new program. B) the budget deficit is reduced by half the amount of the costs of the new program. C) the new program does not result in an increase in the current or future budget deficit. D) none of the above