From the Patterns of Sustainable Specialization and Trade (PSST) perspective, expansionary monetary and fiscal policies that are designed to boost aggregate demand
A) will not work if the money market is in disequilibrium, and may end up making the economy worse.
B) will not work unless alternative sources of energy are employed.
C) may not work if buyers and sellers are out of sync with one another, and may end up making the economy worse.
D) are always successful in pushing the economy to full-employment.
C
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Which of the following is NOT a result of a permanent fall in foreign demand on one country's exports under floating exchange rate?
A) The DD curve shifts to the left due to reduction of aggregate demand. B) The AA curve shifts upwards due to the increased expected long-run exchange rate. C) a reduction in output by a smaller degree compared to temporary fall in demand D) depreciation in home country's currency E) a raised level of unemployment
The impact lag facing the Fed is
A) the delay before open market operations are able to affect the monetary base. B) the delay before the Fed's announcement of a new policy has an impact on the decisions of the public. C) the time required for monetary policy changes to affect output, employment, and prices. D) the delay before the impact of a recession on output and prices becomes clear to the Fed.
Which of the following is a determinant of the price elasticity of demand for an item?
A) the availability of a close substitute for the item B) the percentage of a consumers budget allocated to expenditures on the item C) the amount of time available to adjust to a change in the price of the item D) All of the above are correct.
If reserves increase by $4 million and the required reserve ratio is 8%, what is the resulting change in checkable deposits (or the money supply), assuming that there are no cash leakages and that banks hold zero excess reserves?
A) $3.2 million B) $3.7 million C) $5 million D) $50 million