In the real world, contractionary monetary policy would be used to
A) combat a recession.
B) reduce the rate of inflation.
C) increase nominal GDP.
D) increase long-run aggregate supply.
B
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The biggest challenge faced by the German health care system in the 1990s was
a. eliminating the long waiting lists for expensive medical services. b. integrating East and West Germany into a single system. c. controlling overall health care spending as a percentage of GDP. d. how to control rising physicians' incomes in the name of social solidarity. e. how to provide high-income Germans with an effective safety valve so they will continue to support the system with their taxes.
The monopolist, unlike the perfectly competitive firm, continues to earn an economic profit in the long run because
a. it can charge a higher price than its competitors and not lose market share b. it can innovate, using its profit as research investment c. it can out-compete its competitors d. it has considerable market share e. of impossible-to-overcome barriers to entry
The short-run Phillips curve suggests what policy making implications?
A. Active policy making does not yield any predictable results. B. Passive policy making is more effective than active policy making. C. Maintaining both the inflation and unemployment rates at low levels is possible if policy makers will rely solely on nondiscretionary policy making. D. Using discretionary policies, it may be possible to achieve just the right unemployment and inflation mix.
Easy monetary policy and tight fiscal policy lead to
A. roughly unchanged real interest rates. B. roughly unchanged real interest rates only when Ricardian equivalence holds; otherwise, low real interest rates. C. high real interest rates. D. low real interest rates.