Advocates of stabilization policy prefer quick medicine for economic ills. This leads some observers to favor fiscal policy while others endorse monetary policy. Describe the positions of each side in the debate and what seems to be the current consensus.
What will be an ideal response?
Fiscal policy advocates argue that fiscal policy works more quickly on aggregate demand and that monetary policy only works indirectly through interest rates and investment spending. Monetary policy advocates emphasize the political nature of fiscal policy, which means that fiscal policy has very long lags between recommendation and action. In the current, rather confrontational and divided political atmosphere, most analysts agree that monetary policy may be the “only game in town.”
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Use the following table to answer the next question.YearReal GDPPopulation2008$20,000200200940,000400201060,000400201170,000500Real GDP per capita is highest in which year?
A. 2009 B. 2010 C. 2008 D. 2011
Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill
All else equal, customers who arrive by public transportation to take advantage of Bubba's Hula Shack discount have a ________ for the services of the establishment than customers who drive to the establishment. A) higher price elasticity of supply B) lower price elasticity of supply C) lower price elasticity of demand D) higher price elasticity of demand
When considering the factor distribution of income, which of the following income would go to owners of physical capital?
A. Corporate profits B. Taxes C. Wages D. Proprietor Income
The definition of economic growth is the annual percentage
A. increase in the total nominal GDP. B. increase in the per capita real GDP. C. increase in total exports. D. increase in the per capita nominal GDP.