Which of the following situations is one in which the Fed will potentially pursue expansionary monetary policy?
A) Potential GDP is forecasted to be higher than equilibrium GDP.
B) Potential GDP is forecasted to be lower than equilibrium GDP.
C) Aggregate demand is growing too fast to keep the economy at full employment.
D) Aggregate demand is growing too slowly and the economy is in danger of producing GDP above full employment.
Answer: A
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When considering changes in tax policy, economists usually focus on
A) people's ability to pay taxes. B) the marginal tax rate. C) the average tax rate. D) people's willingness to pay taxes.
Refer to Figure 27-8. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) increase income taxes B) decrease government purchases C) increase government purchases D) sell Treasury bills
Jenny Magalnick is a medical researcher at the National Institutes of Health. She produces a(n)
a. transfer b. entitlement c. public good d. merit good e. government good
If two variables move in opposite directions, they are said to be negatively correlated.
Answer the following statement true (T) or false (F)