Author Question: Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause ... (Read 93 times)

audie · **on:** Jun 29, 2018

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

Question 2

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending

A) the economy will benefit in the short run and benefit by an even greater amount in the long run.
B) this will have a major negative impact on the economy in both the short run and in the long run.
C) this may benefit the economy in the long run, but could be counterproductive in the short run.
D) this may benefit the economy in the short run, but not in the long run.