QUESTION 22 Classical economists argued that “expansionary” fiscal policies a. always produced inflation b. usually worked well to increase real GDP and employment c. were usually ineffective in increasing real GDP or employment d. usually increased real GDP, but lowered employment e. might only impact the housing sector of the economy
QUESTION 23 Based on Say’s Law, Classical economists argued that a recession would not turn into a permanent depression as long as a. workers did not suffer from money illusion b. the government was willing to engage in fine tuning policies c. the discount rate stayed above the federal funds rate d. workers remained interested in working e. velocity was constant
QUESTION 24 Which of the following price indexes is most closely watched by economists and business leaders?
a. the GDP Deflator
b. the CPI-W
c. the Core CPI
d. the price-adjusted PPI
e. the Headline CPI
QUESTION 25
According to Classical economists, an increase in the money supply with no money illusion will cause
a. nominal interest rates to fall and real interest rates to rise
b. nominal interest rates to rise and real interest rates to fall
c. nominal interest rates to fall and real interest rates to remain unchanged
d. nominal interest rates to rise and real interest rates to remain unchanged
e. nominal interest rates to be less than real interest rates
In: Economics
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