In the Smets-Wouters DSGE Model, an Increase in Government Spending

question 71

Multiple Choice

In the Smets-Wouters DSGE model, an increase in government spending will cause:
i. Real GDP to rise
ii. Consumption to fall
iii. Inflation to rise

• A) i and ii
• B) i, ii, and iii
• C) iii
• D) i
• E) ii

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Definitions:

Ownership Of Goods

The legal right or title to possess and use goods, typically transferring from seller to buyer upon payment.

Specific Identification

An inventory valuation method that tracks the cost of individual items or batches of items throughout the purchasing and sales process.

FIFO Method

A method of inventory costing that assumes the first goods purchased are the first goods sold, affecting the cost of goods sold and ending inventory valuation.

LIFO Method

An inventory management and valuation approach where the last items placed in inventory are the first ones sold.