If a country's political leaders wanted to promote economic growth, which of the following policy alternatives would be most effective?
a. imposition of price controls on agricultural products in an effort to keep food cheap.
b. imposition of high marginal tax rates designed to reduce income inequality.
c. imposition of tariffs and other trade restraints limiting international trade.
d. monetary policy consistent with long-run price stability
D
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Based on the record of past business cycles as well as Fed behavior, we can estimate that for expansionary monetary policy the overall lag is approximately
A) eighteen months, about half of which is the effectiveness lag. B) twenty months, slightly more than three-quarters of which is the effectiveness lag. C) ten months, with less than half due to the effectiveness lag. D) nine months, with the effectiveness lag responsible for about six months.
Which of the following statements does NOT describe a function of money?
A) a store of value B) a hedge against inflation C) a standard of deferred payment D) a unit of accounting
Suppose autonomous consumption decreases. This reduction in autonomous consumption will cause which of the following to occur?
A) The consumption function shifts down. B) The consumption function shifts up. C) The consumption function becomes steeper. D) The consumption function becomes less steep.
Under which of the following market structures would consumers likely pay the highest price for a product?
a. perfect competition b. monopolistic competition c. oligopoly d. monopoly