Which of the following is a consensus view among economists with regard to fiscal policy?
a. Changes in fiscal policy exert a strong influence on real output, just as the basic Keynesian model suggests.
b. Expansionary fiscal policy will not help promote recovery from a recession.
c. Restrictive fiscal policy is a potent anti-inflationary weapon.
d. Since changes in discretionary policy are difficult to time correctly, fiscal policy should not be altered in response to each minor disturbance.
D
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Keynesians believe that to help ensure full employment production, we should use
A) both counter-cyclical monetary and fiscal policy. B) a money supply rule and counter-cyclical fiscal policy. C) counter-cyclical fiscal policy only. D) counter-cyclical monetary policy only.
Suppose General Motors issues a four-year bond with a face value of $20,000 that pays an annual coupon payment of $600. What is the interest rate that General Motors is paying on the borrowed funds?
a. 12% b. 6% c. 15% d. 3%
Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?
A. The real GDP figures are a better measure of changes in the general level of prices. B. The real figures will reflect changes in the quantity of output and not changes in the general level of prices. C. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output. D. The real GDP figures adjust for changes in the level of employment.
Evidence in support of the hypothesis that unions increase the productivity of union workers is
A) the fact that union wages are greater than nonunion wages. B) there is an excess supply of labor at the union wage rate. C) that unionized firms face lower turnover rates than nonunion firms do. D) that most contracts are settled without a strike.