Explain why ensuring economic stability is an economics function of government?
What will be an ideal response?
Our economy sometimes faces the problems of high unemployment and rising prices. Perhaps most importantly, the federal government attempts to guide the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By adjusting spending and tax rates (fiscal policy) or managing the money supply and controlling the use of credit (monetary policy), it can slow down or speed up the economy's rate of growth—in the process, affecting the level of prices and employment.
You might also like to view...
Why cannot firms leave the industry in the short run?
What will be an ideal response?
The legislation that made all depository institutions regardless of Federal Reserve membership subject to the reserve requirements established by the Fed is called the:
A) Glass-Steagall Act. B) McFadden Act. C) Monetary Control Act of 1980. D) none of the above
Full employment means which of the following is zero?
a. structural unemployment b. cyclical unemployment c. frictional unemployment d. aggregate unemployment
Offshoring does not affect the percentage of U.S. workers employed in manufacturing
a. True b. False Indicate whether the statement is true or false