Which of the following is a correct conclusion regarding the successful implementation of fiscal policy?
a. Successful fiscal policy would be easy to achieve if Congress would stay out of the economy and permit natural market forces to restore full-employment equilibrium.
b. Successful fiscal policy is difficult to achieve because in the real world the investment, net exports, and consumption schedules are constantly shifting.
c. Successful fiscal policy is much easier to achieve today because econometric models make economic forecasting much easier.
d. As the income-expenditure model suggests, fiscal policy planners can move GDP to any level they please by changing tax and spending levels.
b
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Which of the following statements is correct?
A) Dynamic open market operations are carried out to offset fluctuations in the monetary base. B) Defensive open market operations are carried out to change monetary policy. C) The volume of defensive open market operations is much greater than the volume of dynamic open market operations. D) Defensive open market operations are usually carried out through outright purchases or sales.
When the consumption of a good generates an external benefit:
a. the private benefit consumers receive from the good will be higher than the true social benefit. b. too much of the good will tend to be produced from the viewpoint of economic efficiency. c. the community generally suffers an exactly offsetting external cost from the production of the good. d. the market demand curve will understate the total benefits derived from consumption of the good, and as a result, too little of it will be produced and consumed.
Managed equity funds
A) that have yielded attractive returns during the recent past can generally be counted on to yield similar returns in the future. B) are tied directly to either the Consumer Price Index or Producer Price Index. C) generally outperform indexed equity mutual funds. D) that yielded a high rate of return in the recent past often perform poorly in the future.
The "price" of effectively treating AIDS
A. has stayed the same. B. has gone down substantially with the invention of new drugs that cost less than the older ones. C. is very difficult to estimate because, prior to the new drugs, there was no effective treatment. D. has gone up substantially with the invention of new drugs that cost more than the older ones.