Which of the following was an argument for using fiscal policy in situations like the Great Recession?
A. Congress can act quickly.
B. The size of a recessionary gap may require the use of both fiscal policy and monetary policy.
C. Once the federal funds rate is reduced to zero, monetary policy is less effective.
D. All of these responses are correct.
Answer: A
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“Satisficing” rather than “maximizing” primarily emerges under conditions where
A. information is costly. B. management lacks ambition. C. profit maximization is rejected on moral grounds. D. risk is minimal.
Harold, a delivery man, washes and irons his own shirts. Sarah, his boss, sends her clothes to a laundry. Which is the most plausible economic explanation for this difference?
a. Harold must enjoy ironing more than Sarah does. b. Harold must be better at ironing than Sarah is. c. The opportunity cost of ironing is greater for Harold. d. Harold probably has an absolute advantage in ironing. e. Sarah has a higher opportunity cost of laundering her clothes than Harold does.
Evaluate the following: "Employers who discriminate against women will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity)."
What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?
a. Price will rise. b. Price will fall. c. Price will stay exactly the same. d. The price change will be ambiguous.