How does expansionary monetary policy increase spending in the economy compared to how expansionary fiscal policy increases spending in the economy?
What will be an ideal response?
Expansionary monetary policy increases spending by decreasing interest rates which induces households and firms to increase spending on consumer durables and plant and equipment. Expansionary fiscal policy increases spending by directly increasing government spending or by cutting taxes to increase household disposable income which increases consumption spending.
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When you chose to buy the second cup of coffee instead of the third bagel, which of the following is necessarily CORRECT?
A) The second coffee will give you higher marginal utility. B) The second coffee is cheaper than the third bagel. C) The marginal utility per dollar from the third bagel is less than the marginal utility per dollar from the second coffee. D) Both answers A and C are correct.
China's one child policy
a. Caused the share of young people to rise b. Prematurely aged the Chinese labor force c. Lowered the saving rate d. all of the above e. none of the above
What does it mean for a buyer or seller to be a price taker?
Classical economists are generally associated with:
A. their support of inflation. B. price controls. C. laissez-faire. D. an activist policy.