Monetarists view government intervention in the economy as
A) necessary to maintain full employment.
B) unnecessary and potentially damaging.
C) effective because it stimulates capital formation.
D) leads to consistently higher employment and output.
B
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If a perfectly competitive industry is neither expanding nor contracting, we would typically expect that: a. accounting profits to be zero
b. economic profits to be zero. c. the price of the good will be stable d. both (b) and (c) would be true.
Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling
a. True b. False Indicate whether the statement is true or false
Why did observers at first believe that the damage from the impending subprime mortgage crisis would be too small to cause a recession?
What will be an ideal response?
Answer the following questions true (T) or false (F)
1. Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion. If Congress and the president increase government purchases by $500 billion, then the economy will be brought to equilibrium at potential real GDP. 2. In the case of an upward-sloping aggregate supply curve, the change in real GDP brought about by a change in government spending will be less than that predicted by the simple government purchases multiplier. 3. Crowding out refers to a decrease in government purchases as a result of an increase in private expenditures.