Both monetary policy and fiscal policy affect aggregate demand
a. True
b. False
Indicate whether the statement is true or false
True
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If a country has an absolute advantage in producing a product, it may not have a comparative advantage in producing that product
Indicate whether the statement is true or false
The degree to which monetary forces are the cause of aggregate demand instability is the major controversy between
a. classicists and Keynesians. b. monetarists and new classical economists. c. real business cycle theorists and classicists. d. monetarists and Keynesians. e. None of the above
Purchasing power parity:
A. is the theory that purchasing power in different countries should be the same when stated in localcurrencies. B. allows us to compare the cost of living across different locations. C. almost always holds in reality. D. All of these statements are true.
The Federal Reserve Banking Act of 1978
a. attempted to guarantee stability of the banking system b. was a reaction to the savings and loan crisis c. added full employment to the list of objectives for the Fed d. strengthened deposit insurance programs e. pledged the Fed to keep the inflation rate low