The fiscal and monetary policy alternative to fine-tuning is
A) abandonment of both fiscal and monetary policy.
B) abandonment of fiscal policy in favor of exclusive reliance on monetary policy.
C) budgets established for the long term and a steady growth rate for the money stock.
D) price and wage controls.
E) redistribution of income in favor of those with a higher propensity to spend.
C
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Aggregate supply increases when ________
A. the price level rises B. the money wage rate falls C. consumption increases D. the money price of oil increases
The economy tends to be less stable with a __________ LM curve causing interest rates to be rather __________ to shifts in the IS curve
A) steeper; sensitive B) steeper; insensitive C) flatter; sensitive D) flatter; insensitive
Acme Steel Co produces 1000 tons of steel. Steel sells for $30 per ton. Acme pays wages of $10,000. Acme buys $15,000 worth of coal, which is needed to produce the steel. Acme pays $2,000 in taxes. Acme's profit is
A) $0. B) $2,000. C) $3,000. D) $15,000.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactionsin the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactionsbecomes more negative (or less positive). b. The GDP Price Index and current international transactionsremain the same. c. The GDP Price Index falls, and current international transactionsremains the same. d. The GDP Price Index falls, and current international transactionsrises. e. There is not enough information to determine what happens to these two macroeconomic variables.