Refer to Table 22-7. Consider the statistics in the table above in describing the following industrialized and developing countries. Are these consistent with the economic growth model? Briefly explain
What will be an ideal response?
These statistics combine industrialized countries with developing countries. The statistics in this table are not consistent with the predictions of the economic growth model. For example, Belgium, France, Canada and Denmark had much higher levels of real GDP per capita in 1960 than did Bangladesh, Honduras, and Bolivia. The economic growth model predicts that Belgium, France, Canada, and Denmark should have grown more slowly than Bangladesh, Honduras, and Bolivia. But the table shows that they grew much faster.
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The goal of expansionary fiscal policy is to:
A. increase the money supply. B. cool off the economy. C. reduce interest rates. D. stimulate the economy.
In IS-LM analysis, the nominal interest rate is
A) purely a monetary phenomenon. B) purely a real phenomenon. C) both a monetary and a real phenomenon. D) neither a real nor a monetary phenomenon, but determined by government policy.