The use of discretionary fiscal policy is hampered by
i. difficulty of estimating the level of potential GDP.
ii. lack of accuracy of economic forecasts.
iii. the small impact tax cuts and increases in government expenditure have on aggregate demand.
A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
D
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In a situation where both firms in a two-firm, balanced oligopoly choose to avoid the worst case scenario
a. both firms will end up in the worst case b. both firms end up in a Nash equilibrium outcome c. only one firm will survive d. both firms end up charging different prices e. both firms end up with different profit margins
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and reserves account in the context of the Three-Sector-Model? a. The quantity of real loanable funds per time period rises
and reserves account becomes more negative (or less positive). b. The quantity of real loanable funds per time period falls and reserves account remains the same. c. The quantity of real loanable funds per time period and reserves account remain the same. d. The quantity of real loanable funds per time period rises and reserves account remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.