The most challenging task assigned to conventional monetary and fiscal policies is
A. fighting inflationary recessions.
B. fighting depressions.
C. fighting runaway inflation.
D. lowering our foreign trade deficit.
A. fighting inflationary recessions.
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When the Fed purchases government securities, it:
a. increases banks' reserves and makes possible an increase in the money supply. b. decreases banks' reserves and makes possible a decrease in the money supply. c. automatically raises the discount rate. d. uses discounting operations to influence margin requirements. e. has no effect on either the money supply or the discount rate.
A decision maker should use subjective probability rather than objective probability
A. if solid data describing the frequencies of various outcomes are available. B. if available data are unlikely to describe the circumstances. C. if one of the outcomes were very desirable. D. if she were very enthusiastic about a project.
Excess reserves are the amount by which required reserves exceed actual reserves.
Answer the following statement true (T) or false (F)
A firm that generates pollution is illustrated in Figure 9.7. If the government imposes a pollution tax equal to P3, the firm's abatement choice will be:
A. A1. B. A2. C. A3. D. less than A1.