Monetary policymakers could keep equity and property price bubbles from developing by:
A. lowering their interest rate target when they suspect a bubble.
B. expanding the money supply in the economy.
C. raising their interest rate target when they suspect a bubble.
D. purchasing U.S. treasury securities to drive up their prices.
Answer: C
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Over the past 70 years in the United States, employment in service-producing industries had increased significantly and employment in goods-producing industries has declined significantly. Economists would refer to this process as
A) the classical dichotomy. B) production parity. C) demographic imbalance. D) sectoral shifts.
If a country with a large government debt uses money creation to service and repay the debt, this will lead to
a. lower interest rates. b. an appreciation of the nation's currency in the foreign exchange market. c. inflation, higher interest rates, and a financial crisis. d. rapid economic growth, as the expansionary monetary policy stimulates the economy and generates the additional tax revenue to service the larger debt.
According to Say's law, there can be
A) neither a general overproduction nor a general underproduction of goods. B) a general overproduction but not a general underproduction of goods. C) a general underproduction but not a general overproduction of goods. D) both a general overproduction and a general underproduction of goods.
In general, a greater population growth rate means ______.
a. lower capital stock per worker b. greater economic growth c. a higher standard of living d. fewer diminishing marginal returns