Contractionary fiscal policy is so named because it:
necessarily reduces the size of government
is aimed at reducing aggregate demand and thus achieving price stability
involves a contraction of the nation’s money supply
is expressly designed to expand real GDP
If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP?
Real GDP would rise, but nominal GDP would be unchanged
Nominal and real GDP would both be unchanged
Nominal GDP would rise, but real GDP would be unchanged
Nominal and real GDP would both rise
Which of the following will generate a demand for country X’s currency in the foreign exchange market?
Charitable contributions by country X’s citizens to citizens of developing nations
The imports of country X
The desire of foreigners to buy stocks and bonds of firms in country X
Travel by citizens of country X in other countries
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