The central issue in the stabilization policy debate is
A) the effectiveness of monetary policy and fiscal policy.
B) the effectiveness of fiscal policy, but not monetary policy.
C) the role of money in the inflationary process.
D) the location of the sources of economic instability in the economy.
D
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If the dollar interest rate is 10 percent and the euro interest rate is 6 percent, then an investor should
A) invest only in dollars. B) invest only in euros. C) be indifferent between dollars and euros. D) invest only in dollars if the exchange rate is expected to remain constant. E) invest only in euros if the exchange rate is expected to remain constant.
The most common method used by the government to control negative externalities is
a. creation of private property rights b. obligatory controls c. taxation d. subsidization e. nationalization
Imposing an entry fee on a public park will: a. increase the number of free riders
b. decrease the number of free riders. c. reduce the benefit received by society. d. increase the marginal cost borne by society.
A situation where quantity demanded exceeds quantity supplied is called a(n) ______.
a. substitution b. equilibrium c. shortage d. surplus