If the Fed's goal is to hold income constant, an expansionary fiscal policy must be accompanied by ________ monetary policy, and the Fed must allow the interest rate to ________ significantly
A) an expansionary, rise
B) an expansionary, fall
C) a contractionary, rise
D) a contractionary, fall
C
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The economic model of demand
a. explains the consequences of a change in buyers' tastes, but not the causes b. explains the causes of a change in buyers' tastes, but not the consequences c. explains both the causes and consequences of a change in buyers' tastes d. explains neither the causes nor the consequences of a change in buyers' tastes e. ignores buyers' tastes because they are too unstable to include in the model
The integration of expectations into macroeconomic analysis indicates that
a. fiscal policy is more potent than monetary policy. b. monetary policy is more potent than fiscal policy. c. once people come to expect a given rate of inflation, the inflation will neither stimulate real output nor reduce unemployment. d. higher rates of inflation will lead to lower rates of unemployment in the long run but not in the short run.
Which statement is true?
A. No one receiving public assistance is employed. B. Some people receiving public assistance are employed. C. More people were receiving public assistance in 2007 than in 1994. D. According to current law, no one will be eligible to receive public assistance by the end of 2012.
Exhibit 1A-1 Straight line
As shown in Exhibit 1A-1, the slope of straight line AB:
A. decreases with increases in X. B. increases with increases in X. C. increases with decreases in X. D. remains constant with changes in X.