In a closed economy, in the short-run fiscal is more effective at decreasing unemployment, when: none of the the other options is correct. O government spending is cut by more the central bank is targeting output either the marginal propensity to consume is smaller and/or the real interest rate sensitivity of investment is smaller the central bank is targeting the real interest rate O either the marginal propensity to consume is smaller and/or the real interest rate sensitivity of investment is larger autonomous consumption is larger O larger tax increases are used O autonomous investment is larger

In a closed economy, in the short-run fiscal is more effective at decreasing unemployment, when: none of the the other options is correct. O government spending is cut by more the central bank is targeting output either the marginal propensity to consume is smaller and/or the real interest rate sensitivity of investment is smaller the central bank is targeting the real interest rate O either the marginal propensity to consume is smaller and/or the real interest rate sensitivity of investment is larger autonomous consumption is larger O larger tax increases are used O autonomous investment is larger

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter34: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 4CQQ

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