If inflation is the major problem in the economy, which of the following would be an appropriate monetary policy response?
a. decreasing government spending
b. decreasing the discount rate
c. decreasing reserve requirements
d. none of the above
d
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Suppose workers receive a 5 percent increase in wages and prices are rising by 5 percent. Workers will experience
A) an increase in nominal wages and a decrease in real wages. B) an increase in nominal wages and an increase in real wages. C) an increase in nominal wages but real wages are unchanged. D) a decrease in nominal wages and a decrease in real wages.
Which one of the following does NOT contribute to economic growth?
A) increases in the price level B) the growth of capital and labor productivity C) the growth of the labor force D) the growth of the capital stock
Changes in the price level
A) do not affect the level of aggregate supply in the long run. B) increase the level of aggregate supply in the long run. C) decrease the level of aggregate supply in the long run. D) increase the level of aggregate supply in the long run only at very high levels of output.
An equation that captures how inputs of production are related to output is called a:
A. consumption function. B. GDP deflator. C. production function. D. saving function