How do critics of discretionary stabilization policy view frequent changes in spending and tax policy?
A. The changes make the economy smoother, although it may not look that way to individual firms.
B. The changes make life more difficult and hectic for Congress and the Fed.
C. The changes smooth out the business cycle, making planning easier.
D. The changes cause more instability in the economy and make planning more difficult.
Answer: D
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Use the following table to answer the question below.Giovanni's Production Possibilities ScheduleJorge's Production Possibilities SchedulePounds of Green BeansPounds of CornPounds of Green BeansPounds of Corn0160032040120202408080401601204060801600800If Giovanni produces 40 pounds of green beans and Jorge produces 80 pounds of corn, then the total amount of green bean production equals ________ and the total amount of corn production equals ________. If Giovanni and Jorge specialize in their respective low-cost good, then the total pounds of green bean production equals ________ and the total pounds of corn production equals ________.
A. 200, 100; 320, 160 B. 100, 200; 160, 320 C. 100, 200; 320, 160 D. 200, 100; 160, 320
Today's Federal Reserve bank notes promise to pay the bearer
A) nothing. B) a fixed quantity of gold. C) a variable quantity of gold. D) a specific interest rate. E) a variable interest rate.
List the Fed's main policy tools and briefly explain each one
What will be an ideal response?
The effects of the negative supply shocks of 1973, 1979 and 2007 were different due to the ________
A) role played by rational expectations in the 1979 event B) different sources of the supply shocks C) credibility of the monetary authorities D) different individuals who led the Federal Reserve System