What to do about inflationary and employment problems in the economy? Conservative economists advocate
a. strong fiscal policy, particularly taxing luxuries
b. strong monetary policy, particularly taxing luxuries
c. no interference in the private sector
d. that to pursue aggressive and consistent policy, the Federal Reserve System should become a department with the executive branch of government
e. relying on trends in real business cycles to implement expansionary fiscal policy
C
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Most of the money income that Americans receive annually derives from ownership of
A) interest-bearing bank accounts. B) personal attributes. C) political influence. D) real estate. E) stocks and bonds.
Equivalent variation means
A. finding an equivalent change in income that puts a person on the same utility as a change in price would. B. finding equal tax rates that insure quantity demanded does not change. C. equalizing excess burden across all markets. D. moving the same distance in either direction from a starting point on an indifference curve.
The time it takes for the Fed's purchase of government securities to ultimately change aggregate demand is called the _____
a. recognition lag b. implementation lag c. effectiveness lag d. decision-making lag e. self-correction lag
Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. If the terms of trade are established as 1 ton of apples for 4 tons of oranges: a. there are no incentives
for Omega to engage in international specialization and trade with Alpha. b. it is in the interest of Omega to grow oranges and trade for apples. c. it is in the interest of both countries to specialize and trade with one another. d. there are no incentives for Alpha or Omega to specialize and trade with one another.