In formulating fiscal policy it is necessary to specify the amount of the desired AD shift.
Answer the following statement true (T) or false (F)
True
The essence of fiscal policy entails deliberate shifting of the aggregate demand curve. The steps required to formulate fiscal policy are straightforward: (1) specify the amount of the desired AD shift (excess AD or AD shortfall) and (2) select the policy tools needed to induce the desired shift.
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A player has a dominant strategy when:
A) her chosen strategy gives her a lower payoff than the other player. B) her chosen strategy matches the best response of other players in the game. C) she has many best responses to any strategy of the other player in the game. D) she has only one best response to every possible strategy of the other player.
A country has a growth rate of 3%. Government spending is 60 billion units of currency and its tax revenues are 32 billion units of currency. The current national debt is 400 billion units of currency. At which inflation rate is its debt-to-income ratio unchanged?
a. 2% b. 3% c. 4% d. 5%