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Chapter 10: Macroeconomic objective (page 196)

Which factors are affected when the government implements an expansionary fiscal policy?

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components of AD

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01

Macroeconomic objectives

When we look at the macroeconomic policy within an international context we mainly look at how the governments utilize macroeconomic instruments, such as fiscal policy in influencing the exchange rate about international trade. Fiscal policy may affect the exchange rate through income changes, price changes, and interest rates.

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Most popular questions from this chapter

If the MPS rises, then the MPC will

  1. fall.

  2. rise.

  3. stay the same.

Which of the following scenarios will shift the investment demand curve right? Select one or more answers from the choices shown.

  1. Business taxes increase.

  2. The expected return on capital increases.

  3. Firms have a lot of unused production capacity.

  4. Firms are planning on increasing their inventories.

How can governments utilize fiscal policy?

Why is investment spending unstable?

What are the main macroeconomic objectives of a government?
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