Based on the theories of Smith, Ricardo, and Heckscher-Ohlin, in a country with access to cheap labor, productive land, and diverse plant life, it makes sense to _____ agricultural goods
Fill in the blank(s) with the appropriate word(s).
export
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Discretionary monetary policy was more frequently employed than discretionary fiscal policy in the two decades following World War II because
A) economic conditions did not seem to require any use of fiscal policy tools during this period. B) economists did not yet believe in the effectiveness of fiscal policy. C) inflation was not yet seen as a problem. D) monetary policy could be altered without Congressional action. E) monetary policy was thought to be capable of raising output while holding down prices.
Countercyclical fiscal policy has a serious problem with
a. overshooting the desired impact by a factor of 10. b. the irreversibility of actions. c. the tendency of the Federal Reserve to immediately counter Congressional action. d. the courts as it has been held to be unconstitutional. e. overshooting the desired impact by a factor of 3.
The U.S. government increases its budget deficit, but at the same time Congress eliminates an investment tax credit. Which of the following is correct?
a. The interest rate will increase; investment may increase or decrease. b. The interest rate will decrease; investment may increase or decrease. c. The interest rate may increase or decrease; investment will decrease. d. The interest rate may increase or decrease; investment will increase.
According to Keynesians, an increase in the money supply will:
a. only increases prices. b. increase the interest rate, and decrease investment, aggregate demand, prices, real GDP, and employment. c. decrease the interest rate, and decrease investment, aggregate demand, prices, real GDP, and employment. d. decrease the interest rate, and increase investment, aggregate demand, prices, real GDP, and employment.