In the DSGE Framework, Prospects for a "Fiscal Cliff" in the Fall

question 30

Multiple Choice

In the DSGE framework, prospects for a "fiscal cliff" in the fall of 2012 increases ________ about the future leading firms to ________, which would ________.

• A) uncertainty; delay investment; slow economic activity
• B) federal surpluses; hire more workers; decrease unemployment
• C) state spending; reduce pensions; reduce the labor supply
• D) tax rates; increase investment; improve TFP
• E) interest rates; reduce investment; lead to better long-term growth

---

Definitions:

Quantity of X

The amount or number of a product or service X available or demanded in a market.

Property Crime

Refers to crimes that involve the theft of personal property without the use of force against the victim.

Internet Auction Sites

Online platforms where goods and services are sold through a bidding process, with the highest bid typically winning the item.

Greater Penalties

Refers to the imposition of harsher punishments or fines to deter undesirable actions or behavior within a specific context.