If Federal Reserve officials attempt to pull the economy out of a recession when the price level is relatively stable, the policies they would most likely use would be to:
a. Buy government securities and increase the discount rate
b. Sell government securities and decrease the discount rate
c. Buy government securities and decrease the discount rate
d. Sell government securities and increase the discount rate
c. Buy government securities and decrease the discount rate
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The reference base period that the BLS uses to measure the CPI is
A) 1998-2000. B) 2005. C) 1967-1969. D) 1982-1984. E) 1993-1995.
Which of the following compensation schemes can be explained as an attempt to solve a principal-agent problem?
A) Real estate agents are paid on a strict commission basis; if they don't sell a client's listed property they don't get paid. B) Personal injury lawyers often work on a contingency basis. If the lawyer wins the case they receive a significant share of the award; if the lawyer doesn't win the case the lawyer doesn't get paid. C) Traveling sales people, who are costly and difficult to monitor, generally receive a significant share of their compensation in the form of commissions or bonuses for meeting sales targets. D) All of the above compensation schemes attempt to solve a principal-agent problem.
Suppose a developing country experiences a reduction in machinery and capital equipment as foreign entrepreneurs decrease the amount of investment in the economy. As a result,
A) the economy will move up along the long-run aggregate supply curve. B) the long-run aggregate supply curve will shift to the left. C) the long-run aggregate supply curve will shift to the right. D) the economy will move down along the long-run aggregate supply curve.
Describe the advantages that a negative income tax has over other programs that have the same purpose