If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate?
a. a larger budget deficit and the purchase of securities in the open market
b. a government surplus and the sale of securities in the open market
c. a larger government deficit and an increase in the discount rate
d. a government surplus and a reduction in the discount rate
A
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What makes the Lewis model a "development" model rather than a "growth" model? What insights on development can be derived from the model?
What will be an ideal response?
If MRP > MLC, it means that a firm should
A) use less labor. B) use more labor. C) increase its fixed capacity. D) decrease its fixed capacity.
The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000 . total variable cost to be $130,000 . and total revenue to be $145,000 . Because of this information, in the short run, the Brookside Racquet Club should
a. shut down. b. exit the industry. c. stay open because shutting down would be more expensive. d. stay open because the firm is making an economic profit.
How much is induced consumption?
C = $4.5 trillion Disposable income = $5 trillion Autonomous consumption = $3 trillion