True OR False

11. According to Keynes, an unbalanced budget is very appropriate at certain times. T F

12. The marginal propensity to consume is always equal to or less than 1. T F

16. If aggregate demand is inadequate, equilibrium real output is less than the full employment output level. T F

17. Fiscal policy is rarely used since aggregate demand is typically at the appropriate level for the economy to achieve full employment and price stability. T F

18. If consumers save $0.13 out of every additional dollar, the marginal propensity to consume is 1.3. T F

19. Cyclical unemployment is a problem because it reflects lost output. T F

20. Fiscal restraint may be appropriate if inflation (overspending) is a threat. T F