Friday, February 17, 2017

2012 Macro Multiple Choice (Fiscal Policy)

2012 Macro Multiple Choice (Fiscal Policy)


Fiscal Policy Cheat Sheet here.

Answer - (B)

From the cheat sheet.


Answer - (B)

From the cheat sheet


Answer - (C)

From the cheat sheet



Answer - (C) 

Understand that ann increase in Government Spending increases consumption which increases Aggregate Demand.

From the AD/AS cheat sheet here.



Answer - (A)

Post that answers this here.


Answer - (C)

If the budget deficit is increasing ,, it means that the government is spending and if the government is spending then the Real Interest Rate (RIR) is increasing.