Suppose the actual federal funds rate is below the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that
A. monetary policy is contractionary.
B. fiscal policy is contractionary.
C. monetary policy is neither expansionary or contractionary.
D. monetary policy is expansionary.
Answer: D
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As the result of a decrease in capital, the demand for labor would ________, the supply of labor would ________, and the real wage would ________
A) decrease; decrease; decrease B) decrease; remain the same; increase C) decrease; remain the same; decrease D) decrease; increase; remain the same
When a nation exports a good, its ________ surplus increases and its ________ surplus increases
A) consumer; total B) consumer; consumer C) producer; producer D) producer; total E) total; consumer
A clinic uses doctors and nurses to serve the maximum number of patients given a limited annual payroll. The clinic currently has 10 doctors and 30 nurses. The last doctor hired can serve 300 additional patients, while the last nurse hired can serve 200 additional patients. If doctors make $60,000 a year and nurses make $20,000 a year, the clinic
A. is making the correct hiring decision because doctors are more productive than nurses. B. could serve more patients with the same payroll by hiring more doctors and fewer nurses. C. could serve more patients with the same payroll by hiring more nurses and fewer doctors. D. is making the correct hiring decision because doctors are paid more than nurses.
The largest single transfer program at the federal level is
A. Social Security. B. unemployment compensation. C. farm subsidies. D. the agricultural support program.