In what way do policy makers have to face a trade-off between inflation and unemployment?
a. The cost of reducing inflation by restrictive fiscal and monetary policies is a temporary increase in unemployment.
b. The cost of reducing inflation by restrictive fiscal and monetary policies is a permanent increase in unemployment.
c. The cost of reducing unemployment by expansionary fiscal and monetary policies is virtually nonexistent.
d. The cost of reducing unemployment by expansionary fiscal and monetary policies involves higher inflation during recessions.
a
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Which international account is used to record payments for imports, receipts from exports, net interest paid abroad and net transfers?
A) the capital and financial account B) the current account C) the official settlements account D) the trade account
Financing government spending by selling bonds to the public, which pays for the bonds with currency,
A) leads to a permanent decline in the monetary base. B) leads to a permanent increase in the monetary base. C) leads to a temporary increase in the monetary base. D) has no net effect on the monetary base.
Refer to Figure 9.2. At price 0E and quantity Q*, consumer surplus is the area
A) 0FCQ*. B) AFC. C) EFC. D) AEC. E) none of the above
Which of the following lists two things that both increase the money supply?
a. raise the discount rate and make open market purchases b. raise the discount rate and make open market sales c. lower the discount rate and make open market purchases d. lower the discount rate and make open market sales