According to the Keynesian model, an economy will have persistent, high unemployment if:
a. the government runs a budget deficit.
b. markets operate freely.
c. its total spending is too low.
d. firms make too many investments.
c
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Financial futures contracts are regulated by
A) the Commodity Futures Trading Commission. B) the Federal Trade Commission. C) the Interstate Commerce Commission. D) the Options and Futures Commission.
Suppose the marginal propensity to consume is 0.8. According to the model in the text, how much would equilibrium output go up if the government increased spending by $500 million (assuming all other factors are held constant)?
Select one: a. $400 million b. $625 million c. $900 million d. $2,500 million
Ultimately, trade agreements are necessary because
A. farmers need to be assured of access to foreign markets. B. exports make everyone worse off. C. tariff reduction can be politically popular within many countries. D. tariff reduction can be politically unpopular within many countries.
In a binding situation, the Fed rule calls for
A. a negative output level. B. a positive interest rate. C. a negative price level. D. a negative interest rate.