The conventional fiscal policy to fight a recession is to _________, while the conventional monetary policy is to _________.
Fill in the blank(s) with the appropriate word(s).
run budget deficits; raise the rate of monetary growth
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Suppose output is $1000 billion, government purchases are $200 billion, desired consumption is $700 billion, and desired investment is $150 billion. Net foreign lending would be equal to
A) -$150 billion. B) -$50 billion. C) $50 billion. D) $150 billion.
Figure 8-1
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Based on the scatter diagram in Figure 8-1, approximately how much will consumption increase after a permanent tax cut of $400 billion?
A. $100 billion B. $150 billion C. $250 billion D. $350 billion
Structural unemployment results primarily from automation and long-lasting changes in demand
Indicate whether the statement is true or false
Baumol argued that in an economy where productivity is growing in most sectors (called progressive sectors) and lagging in a few (non-progressive sectors), employment can still increase in the non-progressive sectors:
a. if employers in the non-progressive sectors lower wages. b. by investing in more labor-saving technology in the non-progressive sector. c. by raising prices in all sectors. d. as long as resources are transferred to the progressive sector. e. by transferring resources from cost-saving innovation in the progressive sector to the non-progressive sector