How do critics of discretionary stabilization policy view frequent changes in spending and tax policy?
a. The changes make the economy smoother, although it may not look that way to individual firms.
b. The changes make life more difficult and hectic for Congress and the Fed.
c. The changes smooth out the business cycle, making planning easier.
d. The changes cause more instability in the economy and make planning more difficult.
d
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Which of the following is TRUE regarding a trend?
I. A cross section graph shows trends. II. A time-series graph shows trends. III. A scatter plot shows trends over time. A) I B) II C) I and II D) II and III
When real GDP increases, people demand
A) the same quantity of real money. B) less real money. C) more real money. D) more money in nominal terms but less in real terms.
If stock prices follow a random walk,
A. speculation in the stock market destabilizes prices. B. a stock’s past performance is not a good indicator of its future performance. C. rumors, news, and other “signals” have no effect on stock prices. D. the stock market does not participate in channeling resources toward firms with high stock prices.
The 25 years prior to the crisis of 2008-2009 were
a. characterized by more instability than the first 50 years of the twentieth century. b. the most stable economic quarter of a century in American history. c. characterized by more monetary and price instability than any era other than the 1970s. d. a period of historically slow growth and high unemployment.