A quantity restriction decreases the price of the product and the quantity produced.

In the Keynesian cross model, government spending as a function of national income is a(n): a. horizontal line at a fixed level of expenditure. b. vertical line at a fixed level of real GDP

c. upward-sloping curve. d. downward-sloping curve.

Which of the following is a major deficiency of fiscal policy as a stabilization tool?

a. Congress is reluctant to make changes in either taxes or expenditures. b. The Constitution requires the president to submit and Congress to pass a balanced budget. c. Both political and economic factors make it unlikely that changes in fiscal policy will be timed correctly. d. A change in fiscal policy exerts major effects on the economy quickly.