Stabilization policy refers to attempts to
A) shift the AD curve to smooth short-run fluctuations in output.
B) shift the SRAS curve to smooth short-run fluctuations in output.
C) shift the AD curve to keep the price level as low as possible.
D) shift the SRAS curve to keep the nominal interest rate as low as possible.
A
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The price of wine has risen from $7 to $9 per bottle and the price of cheese has fallen from $6 to $5 per pound, while Anne's income has stayed fixed at $46 per week. Since the price changes, Anne has been buying 4 bottles of wine and 2 pounds of cheese per week. We can conclude that
a. Anne is indifferent about the price changes. b. Anne is worse off after the price changes. c. Anne is better off after the price changes. d. Anne may be worse off, better off, or indifferent after the price changes.
If x is useful for predicting future GDP then
A) x is coincident. B) x is a lagging variable. C) x is countercyclical. D) x is a leading variable.
Direct taxes are levied on specific economic activities
a. True b. False Indicate whether the statement is true or false
Prices of European goods are rising faster than prices of similar goods in the United States. Consequently Europeans substitute American goods for European goods and the euro depreciates. This phenomenon is the basis of
a. Ricardo's Law. b. comparative advantage. c. absolute advantage. d. purchasing power parity.