"Preannounced, stable policies to achieve a low and constant money supply growth and a balanced federal budget are therefore the best way to lower the inflation rate." This statement best illustrates the:
a. Keynesian theory.
b. rational expectations theory.
c. incomes policy.
d. supply-side theory.
b
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By acting as a lender of last resort during a bank panic, the Federal Reserve enables banks to
A) encourage the public to borrow directly from the Fed to alleviate the panic. B) call in their loans from their customers to restore faith in the banking system. C) borrow increasingly large amounts from the Fed, which will reduce the public's faith in the banking system. D) satisfy customers' desires to withdraw money and eventually restore the public's faith in the banking system.
If Jet Cruises chooses to No Ad, Easy Sail should ________ and earn ________ million in net profit.
Jet Cruises wants to prevent Easy Sail from entering the sailboat market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Jet Cruises and Easy Sail have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) Ad; $4 B) No Ad; $10 C) No Ad; $2 D) Ad; $10
When the expenditure approach is used to measure GDP, the major components of GDP are
What will be an ideal response?
According to the principle of diminishing returns, if the number of workers is increased beyond the point of diminishing returns, then the additional worker:
A. increases total output by the same amount as previous workers. B. increases total output by more than the amount of previous workers. C. increases total output by less than the amount of previous workers. D. decreases total output.