Monetary policy is ________ flexible than fiscal policy because monetary policy changes are made by ________, while fiscal policy changes must be made by ________.
A. more; the President; legislative action
B. more; legislative action; the FOMC
C. more; the FOMC; legislative action
D. less; the FOMC; the President
Answer: C
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As a percentage of total world production, production in the 29 advanced economies is about ________ percent of total world production and in the 118 developing economies is about ________ percent of total world production
A) 53; 39 B) 23; 62 C) 53; 12 D) 30; 46 E) 19; 73
On the graph above, a permanent tax reduction, assuming that there is a permanent effect on aggregate supply, is likely to move the economy from point 1 to point ________
A) 2 B) 8 C) 6 D) 3
Court rulings in the 19th century
(a) tended to favor business and profit-making activities. (b) tended to protect traditional amenity rights of property, such as the right to clean air, clean water, scenery and quiet enjoyment of property. (c) tended to favor small business activities over big business corporate activities. (d) tended to promote worker safety and ensure that employers were fully liable for worker injuries, should they occur.
If the economy is producing output at the potential level of GDP, then:
a. an expansionary fiscal policy will increase real GDP in the long run. b. deficit spending by the federal government will increase prices in the long run. c. deficit spending will increase both, the real GDP and the prices in the long run. d. a tax increase will not lower the aggregate demand.