Practice Quiz 5 Answers

According to the classical economists the only way to

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Unformatted text preview: to the Classical economists, the only way to increase income would be to: a. increase government spending which would increase AD b. reduce unemployment benefits to get more people working c. lower interest rates that would increase I d. lower taxes that would increase consumption spending It would have to be an increase in the AS - and this happens when productivity increases or there is an increase in resources - and reducing unemployment benefits would get more people working - an increase in the labor supply UK US price of ounce of gold 20 $10 price of shirt in terms of currency 10 $8 8. Above we have a table that contains the gold price of two currencies and the domestic prices of shirts in two countries. Based on the information in this table and the specie-flow mechanism____. a. the price of the shirt in terms of gold would be higher in the US and we would expect an inflow of gold to the UK b. the price of the shirt in terms of gold would be higher in the US and we would expect an outflow of gold from the UK c. the price of the shirt in terms of gold would be lower in the US and we would expect an inflow of gold to the UK d. the price of...
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This document was uploaded on 03/01/2014 for the course ECN 202 at Rhode Island.

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