In the face of the 2007–2009 recession, the President, Congress, and the Fed
A. decided to rely on the self-correcting mechanism of the economy to eliminate inflation.
B. decided to rely on the self-correcting mechanism of the economy to reduce unemployment.
C. pursued an active policy to balance the budget and fight inflation.
D. pursued an active policy to expand aggregate demand.
Answer: D
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Indicate whether the statement is true or false
Government rules and regulations can, at times,
A) higher transactions costs. B) lower transactions costs. C) better management. D) all of these choices.
Which of the following would not be included in government purchases?
a. The purchase of a computer by a government agency b. Welfare payments c. Wages of government employees d. The purchase of a police car e. Spending on a new missile program
The investment function is represented by
A) an inverse relationship between the interest rate and the value of planned investment.
B) the direct relationship between the interest rate and the value of planned investment.
C) the indirect relationship between taxes and government spending.
D) the direct relationship between taxes and government spending.