Compared with fiscal policy, monetary policy is:
a. more depenent on congressional actions
b. quicker and easier to implement
c. slower and more cumbersome to implement
d. more likely to produce an offsetting net export effect
Answer: b. quicker and easier to implement
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An increase in financial frictions results in ________
A) an increase in output and inflation B) a rise in the interest rate set by monetary policy C) a decline in the real interest rates faced by households and firms D) a decline in the interest rate set by monetary policy
Consider the two graphs above. Suppose producers forecast a decrease in sales. This would ________ the desired level of inventories, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
Which statement is most likely correct about quantity supplied?
a. When economists refer to quantity supplied, they are referring to a certain point on the supply curve or a certain quantity on the supply schedule. b. When economists refer to quantity supplied, they are referring to the relationship between a range of prices and the quantities supplied at those prices. c. Quantity supplied does not change with price. d. Quantity supplied will increase for one good when the quantity of the other good is increased.
Taxes affect market participants by increasing the price paid by the buyer and decreasing the price received by the seller
a. True b. False Indicate whether the statement is true or false