We argued that the tax multiplier is higher in absolute value than the

We argued that the tax multiplier is higher in

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27.We argued that the tax multiplier is higher in absolute value than the government spending multiplier.Points Earned:1.5/1.5Correct Answer(s):False28.The more the Fed accommodates shocks to money demand, the larger the (government) spending multiplier.Points Earned:1.5/1.5Correct Answer(s):True29.According to the Congressional Budget Office (CBO), the stimulus package worked in terms of creating jobs, lowering unemployment, and raising GDP.
Points Earned:1.5/1.5Correct Answer(s):True30.Spending by local governments to stimulate or slow down their local economies is an example of fiscal policy.Points Earned:1.5/1.5Correct Answer(s):False31.When talking about tax multipliers using tax rates instead of the more simple lump sum taxes, we argued that the social security tax cut resulted in a higher tax multiplier.Points Earned:1.5/1.5Correct Answer(s):True32.When we add the marginal propensity to import to our model, the spending multiplier falls. In fact, the higher the marginal propensity to import, the smaller the spending multiplier, all else constant.
Points Earned:1.5/1.5Correct Answer(s):True33.According to the "We are all Keynesians Now" article, the labor secretary at that time wantedthe unemployment rate to fall down to 3%.Points Earned:1.5/1.5Correct Answer(s):True34.The misery index in 1980 exceeded 25.Points Earned:1.5/1.5Correct Answer(s):False35.The mid to late 1970s was the 'heyday' of Keynesian economics in the US economy.Points Earned:1.5/1.5Correct Answer(s):False
36.Keynes believed that it was the responsibility of the government to use its powers to increase production, incomes and jobs.Points Earned:1.5/1.5Correct Answer(s):True37.Consistent with his thought on spending heavily, Keynes was known as an excellent tipper.Points Earned:1.5/1.5Correct Answer(s):False38.The steeper the SRAS curve, the steeper the short-run Phillips curve.Points Earned:1.5/1.5Correct Answer(s):True39.If the long-run aggregate supply curve is vertical so is the long-run Phillips curve.Points Earned:1.5/1.
5Correct Answer(s):True40.Friedman and Phelps agreed that there is a trade-off between unemployment and inflation, but only in the long run.Points Earned:1.5/1.5Correct Answer(s):False

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