The term marginal means

Which of the following are possible consequences when the government reduces government purchases to address an inflationary gap?

I. increase in the price of bonds II. increase in net exports III. decrease in the federal budget deficit (or increase the surplus) IV. decrease in the exchange rate A) I, II, III, and IV B) I and III only C) I, III, and IV only D) II, III, and IV only

The real business cycle theory and the new classical theory agree that

a. business cycles are driven by changes in aggregate demand. b. expectations are formed rationally. c. imperfect information plays a big role in business cycles. d. none of the above.