An expansionary fiscal policy is one when government increases its taxes on its people

• True
• False

The aggregate supply curve shows a relationship between the aggregate price level and the quantity of aggregate output supplied in the economy

• True
• False

In the long-run all recessionary gaps and inflationary gaps will be

• c. Zero
• d. None of the above
• a. Positive
• b. Negative

Fiscal Policy deals with

• c. Government's various expenditure and taxation policies to fine-tune the economy
• d. President's executive power
• b. The monetary side of the economy
• a. The real side of the economy

GDP in an open economy is equal to:

• b. C+1+G+ (X-IM)
• c. C+1+G
• a. C+1+G+T+TR-M
• d. C+1+S

The paradox of thrift says that

• c. Savings is always a good thing
• b. What may seem good on the one hand such as increasing savings rate may be bad on the other hand because it decreases consumption
• d. None of the above
• a. What is good for one is good for all

An inflationary gap can be bridged by the following policy

• c. Increase transfer payments
• b. Cut social security Taxes;
• d. None of the above
• a. Increase military expenditure;

The long-run aggregate supply curve is

• d. None of the above
• c. Downward sloping None of the above
• a. Perfectly horizontal
• b. Perfectly vertical

If the private aggregate savings and government savings combined is less than the required Investment at any point in time a country

• d. None of the above
• c. The economy must be an open economy where foreign investments are taking place
• b. Must be in a depression
• a. Must be in a growth path