Multiple Choice
According to classical macroeconomic theory, an increase in aggregate demand will _____ in the long run.
A) only raise the inflation rate
B) increase both output and the inflation rate
C) only reduce the inflation rate
D) decrease both output and the inflation
Correct Answer:
Verified
Correct Answer:
Verified
Q37: If MPC = 0.9, then the government-purchases
Q38: Which of the following cannot stabilise a
Q39: Suppose the government reduces taxes by $200
Q40: Assume that the MPC is 0.5.A $100-billion
Q41: To eliminate a deflationary gap when the
Q43: Suppose we observe that an increase in
Q44: Suppose government purchases increase by $100 billion,
Q45: At a higher price level, the demand
Q46: The two macroeconomic effects that make the
Q47: Suppose government purchases increase by $200 billion,