A foundation of planned socialism is:
a. the rule of law
b. the median voter rule
c. the primacy of horizontal transactions
d. free pricing
e. material balances
E
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In today's Fed, its primary strategy is to
a. target the federal funds rate in the short-run, target inflation in the long-run. b. target inflation c. target the money supply. d. target the federal funds rate in the short-run, balance inflation and output goals in the long-run.
Which of the following correctly describes the mechanics of the spending multiplier?
a. An initial increase in aggregate expenditure, such as an increase in government spending, shifts the aggregate expenditure curve vertically upward. b. An initial increase in aggregate expenditure, such as an increase in government spending, results in a movement along the aggregate expenditure curve to a higher level. c. An initial increase in aggregate expenditure, such as an increase in government spending, results in a movement along the aggregate expenditure curve to a lower level. d. An initial increase in aggregate expenditure, such as an increase in government spending, shifts the aggregate expenditure curve vertically downward.
Central planning is an ineffective method to organize an economy because
A) central planners do not respond predictably to incentives. B) central planners cannot possibly obtain all the information necessary to allocate resources efficiently. C) most central planners are less intelligent than business entrepreneurs in market economies. D) central planners have inadequate funding to meet the needs of their constituents.
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.