Which of the following statements about the Keynesian model is correct?
a. The economy would achieve full employment if left free from destabilizing government policies.
b. Active monetary is always effective while fiscal policies is rarely so.
c. Both Keynesians and classicists reach the same policy conclusions, but for different reasons.
d. The economy is inherently unstable because of the instability of aggregate demand, which is primarily due to unstable expectations.
e. both b and d.
D
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Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the value of the deadweight loss after the imposition of the price floor?
A) $50,000 B) $125,000 C) $175,000 D) $260,000
Involuntary exchanges, such as robbery,
a. represent potential Pareto improvements b. are positive externalities c. are not Pareto improvements d. are antitrust violations e. may be Pareto improvements
European countries tend to rely more on consumption taxes than does the United States
a. True b. False Indicate whether the statement is true or false
Open market operations designed to fight inflation will drive interest rates _____ and bond prices ______.
Fill in the blank(s) with the appropriate word(s).