Which of the following statements is likely to be made by an economist who does not believe in activist monetary policy? (1 ) The more closely monetary policy can he designed to meet the particulars of a given economic environment, the better. (2 ) Because of long and uncertain time lags, activist monetary policy may be destabilizing rather than stabilizing. (3 ) There is sufficient flexibility
in wages and prices in modern economies to allow the economy to equilibrate in reasonable speed at the natural level of Real GDP, (4 ) The "same-for-all-seasons" monetary policy is the way to proceed. (5 ) There is evidence that monetary policy in the mid-1970s caused a recession.
A) (1), (2), and (3)
B) (1), (4), and (5)
C) (2), (3), and (4)
D) (3), (4), and (5)
E) (1 ) only
C
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Which of the following statements about the budget deficit is TRUE?
A) It is equal to the public debt. B) It is a stock variable. C) It is a flow variable. D) none of the above
The demand for labor is:
a. derived demand. b. featherbedding demand. c. marginal utility demand. d. all of these.
Demand is based on:
a. desires, regardless of ability to pay. b. needs and wants, and the ability to pay. c. what supplies can provide. d. government calculations.
How can the federal budget deficit affect the level of economic growth in the long run?
What will be an ideal response?