When the AS curve is vertical, fiscal policy will be
A. Effective against unemployment but not inflation.
B. Effective against both inflation and unemployment.
C. Effective against inflation but not unemployment.
D. Ineffective against both inflation and unemployment.
Answer: C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
How rapidly does the economy's self-correcting mechanism work? Most economists agree that it
a. works quickly and reliably. b. works slowly and not very reliably. c. works reliably, but not very quickly. d. does not work at all.
Nonactivists favor
A) the use of fiscal policies to manage the economy. B) the use of monetary polices to manage the economy. C) fine-tuning. D) rules for conducting monetary and fiscal policies.
As a result of an increase in demand from D2 to D1 in Figure 36.4, ceteris paribus, the price of a $40,000 U.S. computer system, in terms of Japanese yen, would: =
A. Decrease in price by 200,000 million yen. B. Increase in price by 200,000 million yen. C. Increase in price by 800,000 yen. D. Decrease in price by 800,000 yen.