If you were a government official that wanted to raise the equilibrium price of milk, which of the following actions would you take?
a. Take milk from government storage and sell it.
b. Encourage farmers to produce more milk.
c. Subsidize purchases of dairy equipment.
d. Encourage farmers to produce less milk.
d
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Discretionary funds are typically used by the Executive Branch and Congress for activist fiscal policies
Indicate whether the statement is true or false
Recall the Application about the attempt to form a salt cartel in the 19th century to answer the following question(s).According to the Application, what created local salt monopolies in the early 19th century?
A. high transportation costs that prevented competition B. government regulation C. local labor unions in salt mines D. high taxes on salt that crossed state borders
The demand for home computers has increased, yet the price has fallen. Explain this apparent paradox.
What will be an ideal response?
Which of the following is NOT an argument against using monetary policy to prick asset-price bubbles?
A) The effect of increasing interest rates on asset prices is uncertain. B) A bubble may only exist in some asset-prices and monetary policy will affect all asset prices. C) Using monetary policy to prick an asset-price bubble may have adverse effect on the aggregate economy. D) Even though credit-drive bubbles are easier to identify, they are still relatively hard to identify.