If the economy is near full employment and Congress cuts taxes, the proper monetary policy should be
A. expansionary to keep the economy fully employed.
B. expansionary to counteract the increased deficit.
C. contractionary to shift the aggregate demand curve outward.
D. contractionary to counteract the effects of fiscal policy.
Answer: D
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Autarky is a situation in which a country
A) only imports products. B) only exports products. C) does not trade with other countries. D) has no absolute advantage in any production.
Average fixed cost: a. can be calculated by dividing total fixed cost by the level of output produced
b. can be graphed as a horizontal line, with dollars on the vertical axis and quantity on the horizontal axis. c. decreases as output increases. d. is characterized by both a. and c.
Which of the following will increase economic freedom?
What will be an ideal response?
There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is
200 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are A) PX = 30, PY = 80. B) PX = 40, PY = 60. C) PX = 60, PY = 120. D) PX = 80, PY = 130.