Which of the following is a monetarist assumption that plays a key role in explaining the ineffectiveness of fiscal policy?
A. The instability in the velocity of money.
B. A vertical aggregate demand curve.
C. Crowding out.
D. The liquidity trap.
Answer: C
You might also like to view...
The most important challenge facing a firm in a perfectly competitive market is deciding:
A. what price to charge. B. whether to advertise. C. whether to maximize its profits. D. how much to produce.
In 2014, the price of peanuts was rising, which led peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future Consequently, in the current market for peanut butter there was ________ which resulted in a ________ in the price of peanut butter and ________ in the quantity of peanut butter.
A) a decrease in supply of peanut butter and an increase in demand for peanut butter; rise; an increase, decrease or possibly no change B) a decrease in supply of peanut butter and a decrease in demand for peanut butter; rise, fall, or possibly no change; a decrease C) an increase in supply of peanut butter and a decrease in demand for peanut butter; fall; an increase, decrease or possibly no change D) a decrease in supply of peanut butter and an increase in demand for peanut butter; fall; an increase, decrease or possibly no change
If MPC = 2/3, a decrease in government purchases of $10 billion will ultimately lead to:
a. a $30 billion increase in aggregate demand. b. a $10 billion increase in aggregate demand. c. a $10 billion decrease in aggregate demand. d. a $30 billion decrease in aggregate demand.
All production involves an opportunity cost because
a. to produce costs money b. costs of production are sky rocketing c. to produce more of one thing, we must produce more of everything d. to produce more of one thing, we must produce less of something else e. when an individual obtains more of a good, he may not be fully satisfied