Quesitons

5 important questions on Quesitons

If the MPC is 0.8 and the government increases spending by $100 million, then we would expect the result to be

A)  An increase in real GDP of $500 million.


3. If the government's fiscal policy objective is to pay down the outstanding public debt, the
government must:

A. Have a primary budget surplus that is larger than its interest payments on the public debt.

The aggregate demand curve is: what is the direction of the slope?

A) Downward sloping because of the interest-rate, wealth or real balances, and foreign trade effects.
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Interest rate parity means

a) Differences in interest rates among countries reflect expected changes in exchange rates.

7. In the short run, the outcome of rising energy prices and lowering interest rates is that

A) Output may increase or decrease or remain the same.

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