According to Baumol and Blinder, from the demand side an increase in the price level causes aggregate expenditures to
a. fall, resulting in a lower level of equilibrium income.
b. fall, resulting in a higher level of equilibrium income.
c. rise, resulting in a higher level of equilibrium income.
d. rise, resulting in a lower level of equilibrium income.
a
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Refer to Table 21.2. The bottom 20 percent of earners took home ________ of all income earned in Mysteria
A) 5% B) 8.33% C) 10% D) 29.4%
Attempts to fine-tune the economy through shifts in fiscal and monetary policy
A) cannot alter the level of unemployment but may change the price level. B) may not do any good but certainly do no harm. C) produce greater stability, but only at the cost of an ever-increasing national debt. D) will increase rather than reduce instability if the policy makers lack adequate information.