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Author Question: Suppose the economy is initially operating at full employment. A reduction in the size of the budget ... (Read 107 times)

dejastew

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  • Posts: 562
on: Jun 29, 2018
Suppose the economy is initially operating at full employment. A reduction in the size of the budget deficit will cause which of the following in the long run?
 
  A) a recessionary gap
  B) a reduction in real GDP
  C) an inflationary gap
  D) none of the above

Question 2

Which of the following is a statement with positive economic analysis?
 
  A) Lower wages increase employment and reduce the unemployment rate.
  B) Slower money growth reduces inflation.
  C) A reduction in the size of the budget deficit will reduce interest rates.
  D) all of the above


rnehls

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Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

D


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