One requirement for an effective nominal anchor is ________
A) price stability
B) credibility
C) fixed exchange rates
D) rational expectations
B
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How has U.S. real GDP per person changed over the last 100 years?
What will be an ideal response?
Suppose a country institutes an investment tax credit and that leads to an initial increase in investment spending of $100 billion. Suppose the multiplier is 1.5 and the economy's real GDP is $5,000 billion. This action is
A) expansionary and will shift the aggregate demand curve to the right by $750 billion. B) expansionary and will shift the aggregate demand curve to the right by $150 billion. C) expansionary and will shift the aggregate demand curve to the left by $7500 billion. D) expansionary and will shift the aggregate demand curve to the left by $150 billion.