Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:
a. if the money supply grows at a rate equal to the economy's long-run rate of economic growth, then the economy will be unstable.
b. that changes in the money stock do not affect output or prices.
c. the Fed will miss its money supply targets and make the economy worse.
d. monetary policy can stimulate aggregate demand, but it cannot affect inflation.
c
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What factors can start a cost-push inflation? What must the Fed's response be for the inflation to continue?
What will be an ideal response?
If business cycles are caused by changes in aggregate demand, you would expect to see
a. prices and unemployment moving in the same direction. b. price and unemployment moving in opposite directions. c. prices not moving with unemployment. d. unemployment is not included in the Keynesian model.
Which is the most accurate statement?
A. The federal minimum hour wage rate puts millions of Americans above the poverty line. B. Most black families live below the poverty line. C. In 2008 the poverty rate was higher than it was in 2006. D. Welfare Reform basically eliminated poverty as a major socioeconomic problem.
Competition best describes a market failure that provides an economic rationale for government intervention in markets
Indicate whether the statement is true or false