Describe the difference between discretionary and automatic fiscal policy
What will be an ideal response?
Discretionary fiscal policy is initiated by an act of Congress. Automatic fiscal policy is determined by the state of the economy; no act of Congress is necessary to initiate automatic fiscal policy.
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As part of the "wealth channel of monetary policy," a higher money supply __________ interest rates and thus __________ bond prices
A) raises; raises B) raises; lowers C) lowers; raises D) lowers; lowers
Consider the relationship given by QCars = 100 + 4 × PCars - 2 × PSteel - 0.2 × PWorkers, where QCars is the quantity of cars supplied (in thousands), PCars is the price of cars (in thousands of dollars), PSteel is the price of steel, and PWorkers is the wage earned by autoworkers. If the price of steel is $10 per unit and the price of workers (the wage) is $20, how many cars will be supplied if the price of cars is $20,000?
A. 96,000 B. 156,000 C. 204,000 D. 960,000
The scientific method is
a. the use of modern technology to understand the way the world works. b. the use of controlled laboratory experiments to understand the way the world works. c. the dispassionate development and testing of theories about how the world works. d. the search for evidence to support preconceived theories about how the world works.
Based on the graph showing the market for loanable funds, what will happen at a real interest rate that is higher than equilibrium?
a. Lenders will compete for borrowers and interest rates will fall.
b. Lenders will compete for borrowers and interest rates will rise.
c. Borrowers will compete for loans and interest rates will fall.
d. Borrowers will compete for loans and interest rates will rise.