When faced with negative supply shocks, policymakers:
A. will always focus on stabilizing output.
B. cannot stabilize output so they tend to focus on inflation.
C. will stabilize both inflation and output.
D. face a trade-off because they cannot simultaneously stabilize both output and inflation.
Answer: D
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A) money B) bond C) capital D) commodities
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a. can permanently reduce unemployment if we are willing to tolerate higher inflation. b. can reduce unemployment in the long run if we are willing to tolerate higher inflation. c. may be able to reduce unemployment but cannot retard inflation. d. may be able to reduce unemployment in the short run, but there is little evidence that expansionary policies can reduce unemployment permanently.
The Glass-Steagall Act
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_____________ comes in the form of wages, interest, rent, profit, and even from goverment programs.
a. Spending b. Taxes c. Transfers d. Income