What are fiscal and monetary policies? Do they have an immediate effect on the AD curve or the SAS curve?
What will be an ideal response?
Fiscal policy is defined as changes in government spending and taxation to affect the level of economic activity. Monetary policy consists of changing interest rates and changing the quantity of money in the economy in order to affect the level of economic activity. Both policies have an impact on the AD curve.
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In the 1970s, the U.S. economy ________
A) grew at a faster pace than in the previous decade B) experienced low inflation C) experienced increases in unemployment D) all of the above E) none of the above
An American citizen works for a U.S.-owned architectural firm located in Mexico. This architect will contribute toward:
A. U.S. GDP since he's a U.S. citizen. B. U.S. GDP since he's working for a U.S. firm. C. Mexico's GDP since he's working in Mexico. D. both Mexico's and U.S. GDP.
In the early twentieth century, general stores in the upper Midwest had more power over prices because:
a. they acted as intermediaries between farmers and buyers. b. the transportation network was bad, leaving farmers and buyers with no alternatives except the general stores in small towns. c. inventories at the general stores were low and demand was high. d. stockouts were a chronic problem and there was little variety.
In the real loanable funds market, the vertical and horizontal axes, respectively, are:
a. Nominal interest rate and nominal loanable funds. b. Real interest rate and real loanable funds. c. Real, risk-free interest rate and real loanable funds per time period. d. Real, risk-free interest rate and real loanable funds. e. None of the above.