Activists believe that
a. the M1 money supply should be increased at a steady rate annually.
b. taxes should be increased during a recession in order to balance the federal budget.
c. the economy's self-correcting mechanism, if not stifled by perverse policies, will prevent prolonged periods of high unemployment.
d. discretionary changes in macroeconomic policy can help smooth the business cycle of a market economy.
D
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________ was the main cause of weakening of the U.S. dollar between August 2007 and July 2008
A) Easing of monetary policy in the U.S. B) An increase in the expected value of the dollar C) Rising energy prices D) A surge in exports from China to the U.S.
What happens to the output gap, the real interest rate, and net capital flows with the occurrence of each of the following events? Assume that exchange rates are flexible
a. The Federal Reserve increases the money supply. b. U.S. net exports decrease due to a decrease in incomes in Canada. c. Consumers decide to save more and spend less. d. Expected profits from newly-built factories in the United States decrease.
Testing for the random receipt of treatment
A) is not possible, in general. B) entails testing the hypothesis that the coefficients on W1i, …, Wri are non-zero in a regression of Xi on W1i, …, Wr. C) is not meaningful since the LHS variable is binary. D) entails testing the hypothesis that the coefficients on W1i, …, Wri are zero in a regression of Xi on W1i, …, Wr.
The head tax is regressive
a. True b. False Indicate whether the statement is true or false