According to traditional Keynesian analysis, fiscal policy operates by
A) informing consumers and business people about its plans for the economy so they will know how to adjust their behavior.
B) indirectly affecting aggregate demand through its effect on interest rates.
C) directly affecting aggregate demand.
D) directly affecting aggregate supply.
C
You might also like to view...
The following table provides information about production at the XYZ-TV Company.Number of WorkersTVs ProducedMarginal ProductValue of Marginal Product00------13535$35,00026833$33,00039931$31,000412829$29,000515527$27,000How many workers will XYZ-TV Company hire if the going wage for TV production workers is $32,000?
A. 0 B. 1 C. 2 D. 3
Suppose the actual equilibrium federal funds rate is above the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that
A) monetary policy is contractionary. B) monetary policy is expansionary. C) fiscal policy is expansionary. D) fiscal policy is contractionary.
The discount rate is influenced by Fed actions whereas the Fed sets the federal funds rate
Indicate whether the statement is true or false
Which of the following is likely to increase measured GDP?
A) A greater number of women decide to stay at home and provide day care for their children under age 5. B) Marijuana becomes legal to grow and sell. C) Tax rates increase and more people attempt to underreport their income for tax purposes. D) More people decide to do their own lawn maintenance and give up using a professional service.