Some examples of conventional types of fiscal policy actions are changes in government purchases or in personal taxes.

How does the centrality of institutions and property rights in economic growth help to explain the predominance of rich countries in temperate climates and of poor countries in the tropics?

What will be an ideal response?

Suppose the economy was in equilibrium, and the national government increased spending by $200 billion. Monetarist theory would predict that the:

a. Long-term real GDP growth rate will rise. b. Long-term real GDP growth rate will fall. c. Long-term real GDP growth rate will remain unchanged. d. Long-term inflation rate will fall. e. The international value of the domestic currency will fall.