The figure below depicts the IS-LM-FE model with floating exchange rates.
The move from Point A to Point B is caused by
A. contractionary fiscal policy.
B. expansionary monetary policy.
C. expansionary fiscal policy.
D. contractionary monetary policy.
Answer: C
Economics
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Economics
The unemployment rate is calculated by dividing the number of unemployed and looking for work by the sum of the number employed and the number unemployed and looking for work.
Answer the following statement true (T) or false (F)
Economics