What are the proper monetary and fiscal responses to a recession under the activist view and the nonactivist view?
The activist view holds that the government should respond with expansionary monetary and fiscal policy. Nonactivists support continuation of prior, stable policies, with no additional response to the recession.
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Recall the Application. When applying the Taylor Rule to the decade of 2000, economist John Taylor found that past experience showed that from 2001 to 2004, the Fed should have ________ interest rates instead of ________ interest rates
A) raised; not changing B) not changed; lowering C) lowered; raising D) raised; lowering
Villagers in Xiaogang, China, produced more rice than those in surrounding villages because:
a. they had better farmland. b. they were given better seeds. c. they were able to keep the output they produced individually. d. they made each family responsible for a certain, higher quota of rice production. e. they had common ownership over the rice produced.
Income inequality tends to be greatest in
A. Richest countries. B. Middle-income countries. C. Poorest countries. D. None of the choices are correct.
When an economy is operating well below its full-employment capacity and the marginal propensity to consume is 0.75, a $10 billion increase in investment spending will cause the equilibrium output to rise by:
A. $5 billion. B. $10 billion. C. $20 billion. D. $40 billion.