Those who prefer that the Fed react to negative supply shocks by tolerating higher rates of inflation as a means of moderating a recession are called
a. inflation doves
b. inflation hawks
c. monetarists
d. Keynesians
e. hard headed and soft hearted
A
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
An upward-sloping supply curve of labor implies that
a. any quantity of workers can be hired at the same wage rate b. a higher wage rate is required to attract more laborers c. there is an excess supply of labor in the labor market d. the total labor cost curve is horizontal e. the marginal physical product curve of labor must also be upward sloping
Which of the following indicates the primary mechanism by which the money supply expands?
a. The U.S. Treasury prints additional currency. b. The Fed purchases additional bonds, which increases the reserves available to the banking system. c. The public decides to hold more currency rather than checking deposits. d. The U.S. government purchases additional gold.
Changes in tax rates impact the economy through:
A. Both aggregate demand and aggregate supply. B. Aggregate supply. C. Aggregate demand.