When fiscal policy makers wish to reduce aggregate demand, they could enact:
A. contractionary monetary policy.
B. expansionary monetary policy.
C. contractionary fiscal policy.
D. expansionary fiscal policy.
Answer: C
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Monetarists reject using discretionary monetary policy as an effective stabilization tool because
a. it would require the money supply to grow at a rate equal to the economy's long-run rate of economic growth. b. they do not believe that changes in the money stock affect output or prices. c. they believe that there are lengthy and variable time lags between when a change in monetary policy is instituted and when the change exerts its primary impact on output and prices. d. they believe monetary policy can stimulate aggregate demand, but it cannot control inflation.
State and local governments receive money from sales taxes, property taxes, and the federal government.
Answer the following statement true (T) or false (F)
Relative poverty refers to
A. the number of poor in one state relative to another. B. poverty levels at a stated income cutoff. C. how a family's income compares to the incomes of those around them. D. none of these.
The purpose of fiscal policy is to
A. alter the direction of the economy. B. change people's attitudes toward government. C. offer insight into the way things work. D. educate people as to the importance of economics.