Does expansionary fiscal policy directly increase the money supply? Isn't it true that the president and Congress fight recessions by spending more money?
What will be an ideal response?
No, expansionary fiscal policy does not directly increase the money supply. The president and the Congress fight recessions by increasing spending, not the money supply, by either increasing government spending or cutting taxes to increase household disposable income and, therefore, consumption spending.
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According to President Reagan’s Executive Order 12291,
a. economic criteria had to be met when reviewing any major regulation b. a major regulation was defined as one having an annual effect of $1 million or more c. only least cost is needed in evaluating major rules, with no consideration for maximizing net benefits d. incremental benefits of policy must be maximized, with no consideration for minimizing incremental costs
Wendy has to decide between taking a flight and driving to California. Air tickets cost $800 and will get her to California in 2 hours. If she decides to drive, she would need $300 worth of gasoline and 10 hours to reach her destination
Suppose that Wendy's opportunity cost of time is $20 per hour. Assuming that there are no other costs involved, use cost-benefit analysis to decide whether she should fly or drive to California. If Wendy has an important business meeting to attend and this increases her opportunity cost of time to $200 per hour, will her optimum decision change? Explain.
Generating electricity creates air pollution. This industry, if left unregulated, will produce
A) more than the efficient level of output. B) the efficient level of output. C) less than the efficient level of output. D) sometimes more and sometimes less than the efficient level of output.
In Figure 3-6 above, unplanned inventory decreases occur at
A) point J. B) point K. C) point L. D) all income levels.