One method for a deficit country to correct the situation under a fixed exchange rate system is to
a. increase aggregate demand with stimulative monetary policy.
b. increase aggregate supply with tax cuts.
c. decrease aggregate demand with restrictive fiscal and monetary policy.
d. decrease aggregate supply with restrictive fiscal policy.
c
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For an inferior good, the income and substitution effects
A) work together. B) work against each other. C) can work together or in opposition to each other depending upon their relative magnitudes. D) always exactly cancel each other.
Which of the following can be classified as a regressive tax?
a. Federal corporate income tax. b. Federal personal income tax. c. Federal gasoline tax. d. All of these.
If M is 4,000, Q is 2,000, and P = 8, then V
A. Is 2. B. Is 3. C. Is 4. D. Is 5.
If the Fed pursues expansionary monetary policy then
A) the money supply will decrease, interest rates will rise and GDP will fall. B) the money supply will decrease, interest rates will fall and GDP will fall. C) the money supply will increase, interest rates will rise and GDP will rise. D) the money supply will increase, interest rates will fall and GDP will rise.