Most Keynesians suggest that the Fed
A. use fiscal policy to combat inflation in the long run.
B. follow a rule, such as keeping the money growth rate at 3%, regardless of the state of the economy.
C. use discretion in setting monetary policy.
D. use fiscal policy to combat unemployment in the short run.
Answer: C
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Assume the United States has only one trading partner. The U.S. demand curve for foreign currency is drawn while holding constant all of the following factors except one. Which is the exception?
a. incomes of U.S. consumers b. the exchange rate c. the expected rate of inflation in the U.S. d. the foreign prices of foreign goods e. U.S. interest rates relative to foreign interest rates
Compared to perfect competition, monopoly
A. provides less output. B. charges a higher price. C. results in higher cost (inefficient) production. D. All of these responses are correct.
Economic development encompasses which of the following measures?
a. The political environment b. All of the answers are correct. c. Education d. Economic growth
Growth often requires:
A. concurrent improvements in many aspects of the economy. B. governments to invest in one facet of the economy at a time, starting with leapfrog technology. C. governments to invest in one facet of the economy at a time, starting with education. D. governments to invest in one facet of the economy at a time, starting with basic infrastructure.