ECO 561 Final Exam: ECO 561 - If a firm in a purely competitive industry
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21) Expansionary fiscal policy is so<br />
named because it<br />
A. <strong>in</strong>volves an expansion of the nation's<br />
money supply<br />
B. can only be atta<strong>in</strong>ed by expand<strong>in</strong>g<br />
government consumption<br />
C. is aimed at achiev<strong>in</strong>g greater price<br />
stability<br />
D. can motivate an expansion of real<br />
GDP<br />
Want help? Click to download<br />
eco <strong>561</strong> f<strong>in</strong>al exam 39 questions<br />
22) Suppose the price level is fixed,<br />
the MPC is .5, and the GDP gap is a<br />
negative$100 billion. To achieve fullemployment<br />
output (exactly),<br />
government should<br />
A. <strong>in</strong>crease government expenditures by<br />
$100 billion<br />
B. <strong>in</strong>crease government expenditures by<br />
$50 billion<br />
C. reduce taxes by $50 billion<br />
D. reduce taxes by $200 billion<br />
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