Which of the following is a likely objective of monetary policy?
A) achieving price stability
B) stabilizing economic activity
C) closing the output gap to zero
D) all of the above
E) none of the above
D
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A government-imposed price floor has what effect on efficiency?
A. Consumer surplus increases. B. There is little dead weight loss. C. Consumer and producer surplus increases. D. Producer surplus increases.
When actual real GDP is above natural real GDP, we say that
A) the output gap is positive. B) the output gap is negative. C) the output gap has been eliminated. D) the output gap cannot be calculated.
Figure 21-1
In Figure 21-1, if the existing antipoverty program were replaced by a negative income tax, most economists believe that it would result in a move like which of the following?
A. C to F B. A to B C. D to E D. G to D
Which of the following is characteristic of a downturn in the business cycle?
A. Increased aggregate demand. B. Lower unemployment rates. C. Lower real output. D. None of the choices are correct.