Which of the following would expand aggregate demand according to Keynesians, while stimulating aggregate supply according to modern supply-siders?
A. Increasing transfer payments
B. Open-market purchases of Treasury bonds by the Fed
C. Cutting the discount rate and reserve requirements on demand deposits
D. Cutting personal and corporate marginal tax rates
D. Cutting personal and corporate marginal tax rates
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What is measured by the price elasticity of supply?
A) The price elasticity of supply measures how responsive producers are to changes in the price of other goods. B) The price elasticity of supply measures how responsive producers are to changes in income. C) The price elasticity of supply measures how responsive producers are to changes in the price of a product. D) The price elasticity of supply is a measure of the slope of the supply curve. E) The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product.
If two goods have a ________ cross-price elasticity of demand, then the antitrust agencies can conclude that the products ________ compete in the same market as strong substitutes.
A) large; do not B) small; do C) zero; do D) large; do
The objective of supply-side economics is to _____________. The problem, said the supply-siders, was that ___________ were hurting the incentive to work and invest.
Fill in the blank(s) with the appropriate word(s).
Targeted asset purchases are:
A. statements today about policy targets in the future. B. asset purchases that increase the reserves held by the federal government. C. expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target. D. asset purchases that shift the composition of the Fed's balance sheet.