How does Keynesian economic theory recommend that fiscal policy be conducted?
Keynesian economists believe the government should use its budgetary powers to promote full employment. Expansionary fiscal policy should stimulate aggregate demand when the economy is below potential output. Restrictive fiscal policy should reduce aggregate demand during inflationary periods. In theory, these policies should stabilize the economy and bring it closer to full employment.
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During the 1990s, Canada had an average inflation rate of 1.5 percent while Columbia had an average inflation rate of 21.5 percent. You would expect that nominal interest rates in Canada are
A) unpredictably different from nominal interest rates in Columbia. B) greater than nominal interest rates in Columbia. C) less than nominal interest rates in Columbia. D) not comparable to nominal interest rates in Columbia. E) equal to nominal interest rates in Columbia.
Firms can make decisions using marginal analysis even if they do not know the shape of a demand curve.
Answer the following statement true (T) or false (F)
An increase in productivity as a result of a new technology would cause the production possibilities frontier to:
A. shift in. B. shift out. C. not move until society chooses to move it. D. become more meaningful in policy decisions.
Which of the following components, when combined, is most likely to lead to discrimination by landlords with prejudiced views?
a. uncontrolled rent; few possible renters b. uncontrolled rent; many possible renters c. rent-controlled apartment; many possible renters d. rent-controlled apartment; few possible renters