Monetarists argue that fiscal policy is ineffective because:
a. the velocity of money is predictable.
b. the crowding-out effect reduces investment.
c. prices and wages are sticky in the short run.
d. it causes the value of the dollar to depreciate.
b
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The chief cause of short-run changes in exchange rates is
a. the world's political situation. b. "hot money" chasing high interest rates. c. changes in consumer tastes. d. central bank interventions.
Since at least 1995 the majority of increases in U.S. real GDP are from
What will be an ideal response?
Suppose consumers and business decision makers become more optimistic about the future, and aggregate expenditures increase. The most likely result is that:
A. real GDP and employment and income to decline. B. real GDP and employment rise. C. real GDP rises and employment falls. D. real GDP falls and employment rises.
If the sales of carbonated sodas continue to decline as more cities impose soda taxes on these beverages, this will likely
A) increase the demand for premium water, because premium water and carbonated sodas are considered complements. B) increase the demand for premium water, because premium water and carbonated sodas are considered substitutes. C) decrease the demand for premium water, because premium water is considered an inferior good and carbonated sodas are considered normal goods. D) decrease the demand for premium water, because premium water is considered a normal good and carbonated sodas are considered inferior goods.