Suppose that changes in aggregate demand tended to be infrequent and that it takes a long time for the economy to return to long-run output. How would this affect the arguments of those who oppose using policy to stabilize output?
Those who oppose stabilization policy mostly argue that by the time policy can be put into action and affect aggregate demand, economic conditions may have changed so that the policy is no longer appropriate. If the economy tended to stay on one side of the natural rate of output for a long time, policymakers could worry less about lags.
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Goods and services bought domestically but produced in other countries are referred to as
A) transfer payments. B) exports. C) imports. D) foreign consumption.
The United States has not had a surplus in the last 30 years.
A. True B. False C. Uncertain
The regression R2 is a measure of
A) whether or not X causes Y. B) the goodness of fit of your regression line. C) whether or not ESS > TSS. D) the square of the determinant of R.
Economists who believe in complete crowding out would argue that
A) jobs created or saved because of increased government spending will be matched by an equal number of jobs created by an increase in private sector spending. B) jobs created or saved because of increased government spending will be completely offset by jobs destroyed by a decline in private sector spending. C) government policies intended to stimulate aggregate demand will be completely ineffective. D) government policies intended to stimulate aggregate demand will tend to be effective. E) a and c