Sovereign debt refers to
A) debt owned by the government.
B) bonds issued by the government.
C) debt owed to the government.
D) debt only issued by nations with kings or queens.
B
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Mainstream economists believe that Keynesian economists overstate the effect of the multiplier effect. Which of the following statements would mainstream economists NOT consider to be accurate?
A) A fiscals stimulus does not provide a 'free lunch' but does 'crowd out' private consumption expenditure and investment. B) A fiscal stimulus is a vital tool to fight recession and depression due to the multiplier effect. C) Effects of a fiscal stimulus are small and short lived. D) A fiscal stimulus results in bigger government, lower potential GDP, and slower real GDP growth. E) Effects of a fiscal stimulus are incapable of working fast enough to make a difference.
Which of the following does the long-run Phillips curve tell us?
a. That output can be below potential in the long run b. That the unemployment rate can take on any value in the long run c. That output can be maintained above potential in the long run d. That unemployment will return to the natural rate in the long run e. That the inflation rate cannot rise above 10 percent in the long run