Which of the following is a correct statement?
a. Fiscal policy is the use of tax and spending policies by Congress and the president.
b. Fiscal policy involves the control of the money supply by the Federal Reserve Bank.
c. Monetary policy involves the control of the money supply by Congress and the president.
d. Monetary policy is the use of tax and spending policies by the Federal Reserve Bank.
A
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Due to a "baby bust" in the 1960s and 1970s, fewer people entered the labor market in the 1980s and 1990s
This demographic event ________ the natural unemployment rate thereby shifting the short-run Phillips curve ________ and shifting the long-run Phillips curve ________. A) increased; leftward; rightward B) decreased; rightward; rightward C) decreased; leftward; leftward D) increased; rightward; rightward E) increased; rightward; leftward
If expected inflation rises, monetary policy ________
A) is rendered ineffective B) must be tightened, to prevent further increases in inflation and expected inflation C) will prevent any increase in the real interest rate D) is designed to increase the nominal interest rate by more than the increase in expected inflation E) none of the above
Picture in your mind's eye the graph of a profit-maximizing monopolist. If its cost curves—both ATC and MC—shift upward while its demand curve remains unchanged, the monopolist will
a. decrease price and increase output b. decrease both price and output c. increase price and decrease output d. increase both price and output e. keep both price and output at the same level
According to Milton Friedman, the reason there are two Phillips curves is because
A) the expected inflation rate is always higher than the actual inflation rate. B) wages are inflexible. C) prices are inflexible. D) the expected inflation rate does not instantaneously adjust to changes in the actual inflation rate. E) the expected inflation rate is equal to 1 minus the actual inflation rate.