If an economy were experiencing a high rate of unemployment as the result of weak aggregate demand, a Keynesian economist would be most likely to recommend
a. a reduction in taxes coupled with a reduction in government expenditures of equal size.
b. an increase in government expenditures coupled with an increase in taxes of equal size.
c. a reduction in taxes, without any offsetting reduction in government expenditures.
d. maintenance of a balanced budget.
C
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Why hasn't the U.S. ratified the Kyoto Protocol?
a. It views the agreement as not merely flawed or incomplete, but actually harmful. b. It fears the economic consequences of reducing fossil fuel use. c. It does not consider the environment a major priority. d. Its leaders and politicians overwhelmingly believe global warming is not a real threat.
Suppose a middle-class tax cut increases consumption expenditures. Which of the following would you expect to occur as a result of this change? a. The economy will move up and to the left along the short-run Phillips Curve. b. The economy will move down and to the right along the short-run Phillips Curve. c. The short-run Phillips Curve will shift to the left
d. The short-run Phillips Curve will shift to the right.