Which of the following statements about Fiscal Policy is INCORRECT (a) In order to combat inflation, the South African Reserve Bank must apply a contractionary fiscal policy; (b) A contractionary fiscal policy can result in higher levels of unemployment; (c) Expansionary fiscal policy will increase the budget deficit; (d) The application of fiscal policy will have no effect on aggregate supply in the AD‐AS model.
Which of the following statements about Fiscal Policy is INCORRECT
(a) In order to combat inflation, the South African Reserve Bank must apply a contractionary fiscal policy;
(b) A contractionary fiscal policy can result in higher levels of
(c) Expansionary fiscal policy will increase the budget deficit;
(d) The application of fiscal policy will have no effect on
If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan’s:
(a) Real and nominal income both remain unchanged;
(b) Real and nominal income both rise;
(c) Real income rises but nominal income remains unchanged;
(d) Nominal income rises but real income remains unchanged.
Given the import function, Z = 300 + 2/3Y, which of the following statements is correct?
- The marginal propensity to save is 1/3;
-
The induced component is 300;
-
2/3 is the proportion of any income spent on imports;
-
None of the statements is correct.
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