Which of the following statements is(are) correct
a. As a result of the Great Depression of the 1930s, the quantity theory had come into disrepute, together with the rest of the classical theories.
b. According to Friedman, the depression was caused by a fall in aggregate supply and not aggregate demand as believed by the Keynesians.
c. As a result of the Great Depression of the 1930s, Friedman believed that the Keynesians had nothing to say about money demand.
d. All of the above
e. both b and c.
C
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A reduction in tax expenditures _____
a. will cause tax revenues to rise b. will cause government spending on social policy to rise c. will cause inflation to rise d. will reduce the tax base
Suppose total benefits and total costs are given by B(Y) = 100Y ? 8Y2 and C(Y) = 10Y2. What level of Y will yield the maximum net benefits?
A. 100/36 B. 75/36 C. 75/18 D. 50/18
As actual output falls below the potential level in the short run, which of the following is most likely to occur?
What will be an ideal response?
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease