When the government uses taxes and spending to affect national economy, it is engaging in:
a. fiscal policy.
b. monetary policy.
c. interest rate policy.
d. trade policy.
e. exchange rate policy.
a
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What is one of the advantages of monetary policy over fiscal policy?
A. Its control over the size of Federal budget deficits B. The quickness with which it can be used C. The opportunity for broad political influence D. It can guarantee an expansion of aggregate demand when needed
The impact of the multiplier effect is to:
A. smooth out the up and down swings of the business cycle. B. promote price stability. C. magnify small changes in spending into much larger changes in real GDP. D. reduce the impact of an increase in investment on output and employment.
Which of the following biases the CPI to underestimate increases in prices?
a. The substitution bias b. The quality bias c. The new outlet bias d. None of the above
The word "theory" means the same to the scientist as it does to the man on the street
a. True b. False Indicate whether the statement is true or false