Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) lower; lower
B) lower; higher
C) higher; higher
D) higher; lower
Answer: A) lower; lower
You might also like to view...
Marginal cost is the minimum price that producers must receive to induce them to produce another unit of a good or service
Indicate whether the statement is true or false
According to the Keynesian model, the optimal fiscal policy is to
a. increase cyclical but not structural deficits during a recession. b. reduce cyclical and structural deficits during a recession. c. increase structural deficits during an recession. d. maintain a balanced budget in case of national emergency.
Kurt Gerdenich receives a consumer surplus while buying eggplants at the farmer's market if
a. the value he places on the eggplants is less than their price b. he gets a higher total utility from buying eggplants than from buying any other good c. the price of eggplants is less than the price of other goods that he values the same as eggplants d. only a few eggplants are available for sale e. the value he places on eggplants is greater than their price
According to influential moral philosopher Jeremy Bentham:
A. utility functions should provide cardinal information about preferences. B. the aim of public policy should maximize an individual's utility. C. utility functions should provide ordinal information about preferences. D. public policy decisions should be based on ordinal utility.