Author Question: Using the aggregate demand and supply model, expansionary fiscal policy will not affect the price ... (Read 115 times)

jc611 · **on:** Jun 30, 2018

Using the aggregate demand and supply model, expansionary fiscal policy will not affect the price level, but will restore full-employment GDP.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Under adaptive expectations, the short-term effect of an unanticipated shift to a more expansionary macroeconomic policy will be a:
a. temporary reduction in the unemployment rate.
b. permanent reduction in the unemployment rate.
c. temporary reduction in the inflation rate.
d. permanent reduction in the inflation rate.