Fiscal policy to solve short-run economic problems supports the Keynesian notion of
A) there being no government role in the economy. B) the need for autocratic rule.
C) an active government role in the economy. D) the long-run nature of the economy.
C
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Assume that in the market for plasma TVs there is an increase in supply. The result will be:
A) an increase in equilibrium price and quantity. B) a decrease in equilibrium price and quantity. C) an increase in equilibrium quantity and uncertain effect on equilibrium price. D) a decrease in equilibrium price and increase in equilibrium quantity.
An example of the moral hazard problem in international investment would be that
A) those seeking funds for the riskiest projects are amongst those most actively seeking the funds. B) the recipients of the funds may use the funds for riskier projects than the approved project. C) government officials may demand higher than the usual amount of bribes. D) those seeking the funds are dishonest.