If the Fed bases its monetary policy on judgments of its policymakers about the current needs of the economy, it is following
A) discretionary policy.
B) a money targeting rule.
C) an inflation targeting rule.
D) wait-and-see policy.
E) a monetary base instrument rule.
A
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Which of the following would typically be considered a cost of economic growth?
A) increased illiteracy B) decreased levels of health C) increased poverty D) urban congestion
If we wanted to analyze the effects of a $2 unit tax graphically, we would shift the
A) supply curve upward by $2. B) supply curve downward by $2. C) demand curve upward by $2. D) demand curve downward by $2.
In 2001, Congress and President Bush instituted tax cuts. According to the short-run Phillips curve, in the short run this change should have
a. reduced inflation and unemployment. b. raised inflation and unemployment. c. reduce inflation and raised unemployment. d. raised inflation and reduced unemployment.
In a principal-agent problem, if the contract implies that the more risk-averse agent will bear less risk, we can say that this contract exhibits
A) efficiency in risk-bearing. B) risk sharing is not optimal because the less risk-averse (or risk-neutral) agent should bear none of the risk. C) risk sharing is not optimal because all risk should be transferred to the most risk-averse agent. D) risk sharing is not optimal because risk-neutral agents should face no risk.