The Keynesian analysis of fiscal policy implies that
a. fiscal policy should generally be expansionary except during periods of economic recession.
b. fiscal policy should generally be restrictive except during inflationary booms.
c. the federal budget should be balanced annually except during war.
d. the federal budget should be used to maintain aggregate demand at a level consistent with full employment.
D
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For consumers, taco chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of taco chips?
A) The equilibrium price of taco chips falls, and the equilibrium quantity decreases. B) The equilibrium price of taco chips rises, and the equilibrium quantity decreases. C) There is no change in the equilibrium price of taco chips, and the equilibrium quantity increases. D) The equilibrium price of taco chips could rise, fall, or stay the same, and the equilibrium quantity increases. E) The equilibrium price of taco chips rises, and the equilibrium quantity increases.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.