Which of the following statements about the expenditure multiplier effect is a false statement? A) GDP does
Question:
- Which of the following statements about the expenditure multiplier effect is a false statement?
A) GDP does not change when the expenditure multiplier changes.
B) The multiplier is a ratio of the change in GDP to the change in aggregate expenditure.
C) The multiplier has a value greater than one.
2,Of the following government policies, which would be considered a neoclassical response to an economic recession?
A) an increase in government spending
B) adjusting the minimum wage higher
C) dissolving labor unions
3.Neoclassical economists have a tendency to put more emphasis on long-term growth than on fighting recession. Why is this the case?
A) The rate of inflation is determined by the upward trend of potential GDP.
B) Because over the long run, recessions end.
C) Wage stickiness and price are reasonable in the short run.
D) Government focuses more on cyclical unemployment and recessions.
5.Which of the following scenarios, from the Keynesian perspective, increases aggregate demand?
A) Increase in net exports because of foreign demand.
B) U.S. goods increasing in relative price.
C) Decrease in net exports because of lack of foreign.
5.If an economy falls into a recession, there is no way to coordinate lower wages across the economy for workers according to Keynes because of the ________.
A) progressive wage theory
B) coordination argument
C) complexity argument