Policy makers who believe that the costs of inflation are very high will tend to favor which of the following during an inflationary gap?
a. moderate fiscal stimulus, no monetary stimulus
b. fiscal and monetary tightness
c. moderate monetary stimulus, fiscal tightness
d. strong fiscal and monetary stimulus
b
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Which of the following are included in the M1 definition of money?
A) currency and checkable deposits B) currency and savings deposits C) traveler's checks and money market mutual funds D) currency and small time deposits E) traveler's checks and savings deposits
Discuss the correct and incorrect economic analysis in the following statement
"The United Auto Workers Union has successfully negotiated a 9 percent increase in wages for its workers. This increase in the wage rate causes an increase in demand for automobiles, since many consumers now have greater incomes, and also a decrease in the supply of automobiles because the cost of production has increased. These effects cancel each other out resulting in no change in equilibrium price and quantity in the automobile market."
The sum of the coins and currencies in the bank's vault and its deposit in the Fed is called:
a. vault cash. b. transaction deposits. c. legal reserves. d. required reserves. e. loanable funds.
Some electrical utilities are monopolies because of
A. diseconomies of scale. B. their inability to earn profits. C. ownership of resources without close substitutes. D. government restrictions that prevent new firms from entering the market.