Reference no: EM13173920
1. If there is a constitutional requirement to maintain a balanced budget, then during a recession when tax revenues are shrinking, the government will have to implement:
a. Contractionary fiscal policy
b. No change in fiscal policy
c. Expansionary fiscal policy
d. Countercyclical fiscal policy
2. Which short-run version of aggregate supply assumes that product prices are:
a. Fixed while resource prices are flexible
b. Flexible while resource prices are fixed
c. Both input and product prices are flexible
d. Both input and product prices are fixed
3. Demand-pull inflation is illustrated in the short run aggregate supply-aggregate demand model as a shift of the aggregate:
a. Supply to the right
b. Supply to the left
c. Demand to the right
d. Demand to the left
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