According to classical economic theory
A. deficit financing is the only effective remedy for recession.
B. fiscal policies are more effective than monetary policies as economic stabilization tools.
C. if the economy is experiencing excessive inflation, the government should raise taxes and/or cut expenditures.
D. falling wages and prices would be the natural cure to recession.
D. falling wages and prices would be the natural cure to recession.
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The opportunity cost of using one’s own savings in operating a business can be determined by using
a. wage rates. b. interest rates. c. exchange rates. d. rental rates.
A production goal may be set too high by upper management because
a. they are unsure about the actual costs of production b. they under-estimate the difficulty of meeting a goal c. division managers over-state the difficulty of meeting the goal d. all of the above
An increase in fixed cost will, in the long run, alter the industry output of
a. both a monopolist and a competitive industry. b. only a monopolist. c. only a competitive industry. d. neither a monopolist nor a competitive industry.
A professor of economics gets a $100 a month raise. She figures that even with her new monthly salary she will be unable to buy as many goods and services as she could 12 months ago.
What will be an ideal response?