With its goal of high employment, the Fed attempts to
A) keep unemployment at its natural rate.
B) keep the unemployment rate as close to zero as is possible.
C) eliminate all but cyclical unemployment from the economy.
D) maintain equal rates of frictional, structural, and cyclical unemployment.
A
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If a policy maker is convinced that time lags frequently negate the impact of short-run stabilization efforts, it is likely she would favor ________ policy making
A) nondiscretionary B) discretionary C) aggressive D) active
The Laffer Curve only applies to income taxes
a. True b. False
The decisions on the part of the government to increase spending by $5 billion will have the largest impact on aggregate demand when the spending is financed by the sale of bonds to
a. the member banks. b. the public. c. the Fed. d. foreigners.
When private ownership rights are well-defined and enforced, owners of physical assets and resources
a. have no incentive to consider the desires of others. b. incur the opportunity cost of ignoring the wishes of others. c. are not responsible if the use of their assets impose harm on others. d. have little incentive to take care of their assets.