Discuss how actions taken by the Federal Reserve during the Great Recession influenced government spending.
What will be an ideal response?
The quantitative easing policies used by the Fed during the Great Recession created two major incentives for the government to increase spending. First, the low interest rates the government paid on its debts encouraged spending. The Fed also was a willing buyer for the securities that fund government debt, being the government’s primary lender.
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A soda factory employs seven workers and produces 500 bottles of soda a day. The company reduces the workforce to six workers and output is now 450 bottles a day. The seventh worker:
A. had a marginal product of 50 bottles of soda. B. caused average product to fall. C. had a lower marginal product than the sixth worker. D. All of these are true.
Government policies that use taxes and government spending in an attempt to stabilize the economy are known as a. Trade policy
b. Regulatory policy. c. monetary policy. d. fiscal policy.
The opportunity cost of holding money varies with the __________.
Fill in the blank(s) with the appropriate word(s).
Supporters of national health insurance:
a. see health care as a fundamental right b. believe that the best way to ration health care is through competitive markets c. both of the above d. neither of the above