Since real GDP is less than potential GDP due to COVID-19 pandemic, which of the following fiscal policies would increase real GDP?

Select one:

A. Increase in the short-term interest rate

B. Only an increase in taxes

C. A decrease in government expenditure and/or an increase in taxes

D. Only a decrease in government expenditure

E. An increase in government expenditure and/or a decrease in taxes

If the aggregate demand curve shifts rightward following a decrease in the overnight policy rate,what can be concluded if Fiji's short -run aggregate supply curve is steep?

Select one:

A. There is significant unemployment and slack in the economy

B. Reserve bank will achieve price stability

C. There will be little increase in real GDP but a significant increase in the price level.

D. There will be a significant increase in both real GDP and the price level.

E. There will be a significant increase in real GDP with little impact on the price level.

The marginal propensity to import indicates the relationship between changes in imports and changes in

Select one:

A. Consumption expenditure

B. Next exports

C. Real output

D. Net investment spending

E. Nominal exports