In the short run, expansionary fiscal policy usually will
A. increase real GDP and decrease the price level.
B. decrease the price level and increase real GDP.
C. increase both real GDP and the price level.
D. decrease both real GDP and the price level.
Answer: C
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The economy is in a recessionary gap, wages are inflexible downward, and there is complete crowding out. Which of the following is consistent with this state of affairs?
A) The economy will soon self-regulate and produce Natural Real GDP. B) Expansionary fiscal policy will be effective at removing the economy from the recessionary gap. C) If expansionary fiscal policy is implemented, the AD curve will shift to the right, and eventually the price level and Real GDP will rise. D) b and c E) none of the above
If the exchange rate of the Swiss franc is 1.61 francs per dollar, then the Swiss franc is worth about
A. 15 cents. B. 57 cents C. 62 cents. D. $15.70.
The required-reserve ratio is equal to:
A. A commercial bank's checkable-deposit liabilities divided by its required reserves B. A commercial bank's required reserves divided by its checkable-deposit liabilities C. A commercial bank's checkable-deposit liabilities multiplied by its excess reserves D. A commercial bank's excess reserves divided by its required reserves
The Consumer Financial Protection Bureau is part of the
A) Treasury Department B) Federal Reserve System C) Justice Department D) Commerce Department