The government can fight inflation by manipulating both aggregate demand and aggregate supply
a. True
b. False
Indicate whether the statement is true or false
False
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Monopolists use the hurdle method of price discrimination in order to:
A. produce the socially optimal level of output. B. increase the demand for their good. C. lower their marginal cost. D. separate consumers on the basis of their reservation prices.
If a government pursues the industrial policy of import substitution, it is:
A. protecting domestic industries until they are efficient enough to compete in the world market. B. giving consumers incentive to substitute imported goods for those domestically produced. C. encouraging domestic industries to ship imports to other countries. D. mandating that imports can only be sold if the domestic economy does not produce that particular good.
In terms of investing, what is suggested by the random walk theory?
a. Future stock prices cannot be predicted. b. Stocks are a safer investment than bonds. c. Long-term investments are risky but necessary. d. Wealthy people are prepared to handle stock risks.
Explain some important situations where direct controls have a clear advantage over taxes.
What will be an ideal response?