An inflationary gap can be closed with
A) using an expansionary monetary policy.
B) using a policy action such as a reduction in taxes.
C) using a policy action such as a reduction in government purchases.
D) imposing price controls to prevent prices from rising.
Ans: C) using a policy action such as a reduction in government purchases.
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If monopolies are both inevitable and bad, which policy alternative will be least disruptive of all effective policy alternatives?
a. regulate prices b. nationalize c. laissez-faire d. encourage concentration e. split up the monopoly
According to the quantity theory of money, if the monetary authorities allow the money supply to grow at a rate of 6 percent in an economy that is growing by 2 percent in real terms, then inflation will be:
A. 4 percent. B. 6 percent. C. 8 percent. D. 2 percent.
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Jerry has a comparative advantage in:
A. dish production because he has the higher opportunity cost of a dishes. B. fence production because he has the higher opportunity cost of a fence. C. dish production because he has the lower opportunity cost of a dishes. D. fence production because he has the lower opportunity cost of a fence.
What have been the poverty trends in the past forty-five years?
What will be an ideal response?