Two variables that affect the slope of the aggregate demand curve are
A. government purchases and real taxes.
B. tax rates and interest rates.
C. government purchases and interest rates.
D. exchange rates and income rates.
Answer: B
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Professor Cowen says that fiscal policy would make more sense if we:
A. relied more heavily on tax cuts than we currently do for fiscal policy. B. ran government budget deficits in years in which the unemployment rate was high. C. used a combination of tax cuts and increases in government spending. D. actually had government budget surpluses in years in which the economy was in good health.
The real interest rate can be approximated by
a. adding the nominal interest rate and the inflation rate b. subtracting the nominal interest rate from the inflation rate c. adding last year's nominal interest rate to this year's d. subtracting the inflation rate from the nominal interest rate e. none of the above