With normally-sloped IS and LM curves, an increase in government spending ________ the interest rate, which ________ autonomous planned expenditure, resulting in a final increase in income ________ than what the government spending increase would
have produced in the Chapter 3 model. A) lowers, raises, greater
B) lowers, lowers, greater
C) raises, lowers, less
D) raises, raises, less
E) raises, raises, greater
C
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In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars
Sue's opportunity cost of changing oil is ________ than Fred's and her opportunity cost for changing tires is ________ than Fred's. A) greater; less B) less; greater C) less; less D) greater; greater
For a firm with market power, advertising expenditures affect all of the following except which one?
A) total cost B) demand curve C) marginal cost D) marginal revenue
Which of the following is a reason for the Keynesian view that monetary policy plays a minor role in affecting the economy?
a. The money demand curve is vertical. b. The investment curve is very steep. c. The money demand curve is horizontal at any interest rate. d. The monetary rule.
Describe the two basic philosophies of taxation fairness