Answer the following questions true (T) or false (F)
1. Prior to the 1930s, the majority of dollars spent by government was spent at the state and local levels.
2. Expansionary fiscal policy involves increasing government purchases or increasing taxes.
3. Contractionary fiscal policy is used to decrease aggregate demand in an attempt to fight rising inflation.
1. TRUE
2. FALSE
3. TRUE
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If the desired reserve ratio is 7 percent and a bank has $10,000 of deposits, then its desired reserves are
A) $7. B) $700. C) $9,300. D) $930. E) $7,000.
A hot dog vendor on a street corner could increase the quantity of hot dogs her customers demand by 12 percent if she lowers the price of a hot dog 10 percent. The demand for the hot dogs is
A) cross elastic. B) arc elastic. C) unit elastic. D) elastic.
Macroeconomics studies the determination of
a. total output, total employment, the general price level, and the general level of interest rates b. total output and the general level of interest rates only c. total employment and the general level of prices only d. the interaction of individual economic actors in specific markets and industries e. the levels of employment and prices in specific markets and industries
If a runner's demand for bottled water increases, and the market price remains unchanged, the runner's consumer surplus
a. falls because the difference between what the runner is willing to pay and price decreases b. falls because the marginal utility of bottled water falls when the demand curve shifts to the left c. remains constant because price doesn't change d. increases e. is zero