One key purpose of fiscal policy is to ________ volatility in the business cycle.
A. reduce
B. maintain
C. eliminate
D. increase
Answer: A
You might also like to view...
In the United States, bank reserves include:
A) vault cash, currency held by the public and bank's holdings on deposit at the Federal Reserve Bank. B) currency held by the public and bank's holdings on deposit at the Federal Reserve Bank. C) vault cash and the bank's holdings on deposit at the Federal Reserve Bank. D) vault cash and the currency held by the public.
If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year, we know that
A) the market basket used by the BLS must be changed next year to reflect consumers' new expenditures. B) the next year's CPI will be below 100. C) the next year's CPI will be above 100. D) the inflation rate is falling. E) the cost of the CPI market basket at next year's prices is lower than the cost of the CPI market basket at base period prices.
According to adaptive expectations theory, which of the following would be the result of expansionary monetary and fiscal policies?
A. The economy self-corrects to the natural rate of unemployment. B. There is a long-run trade off between inflation and unemployment. C. The inflation rate falls. D. These policies can succeed in reducing the unemployment rate.
In a business cycle, the low point of economic activity is called
A. a peak B. a low C. a bottom D. a trough