In the figure above, if there is no Ricardo-Barro effect, the government has a ________ because ________
A) budget deficit; there is no Ricardo-Barro effect.
B) balanced budget; there is no Ricardo-Barro effect.
C) budget surplus; the SLF curve lies to the right of the PSLF curve.
D) budget surplus; there is no Ricardo-Barro effect.
E) budget deficit; the SLF curve lies to the right of the PSLF curve.
C
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The table above gives the aggregate demand and aggregate supply schedules in Lotus Land
With no changes in aggregate demand or long-run aggregate supply, in long-run macroeconomic equilibrium, the price level will be ________ and real GDP will be ________. A) 120; $400 B) 110; $500 C) 90; $400 D) 100; $600
According to Gordon, a major problem with Keynes' "rigid nominal wage" theory of the business cycle is
A) a horizontal LM curve. B) it is not a market clearing theory. C) falling real wages are not countercyclical with business activity or Y. D) None of the above.