Why do some people oppose having monetary policy more directly controlled by the president and Congress?
a. They fear that such action would make the process less efficient.
b. They want macroeconomic decisions to be protected from political pressures.
c. They fear that Congress and the president would focus only on expansionary policies.
d. They want special interest groups to have more influence on monetary policy than Congress.
b. They want macroeconomic decisions to be protected from political pressures.
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Describe the impact of contractionary fiscal policy (such as a decrease in government spending) upon Real GDP in both a closed economy and an open economy. In which type of economy would the change in Real GDP be greater?
If firms seek an average markup of 25% over labor costs, and this is consistent with labor demands at the natural rate, then in the long run
a) real wages will be 25% of the price level b) prices will be 4 times greater than wages c) wages will rise 80 cents for every $1 increase in prices d) wages will fall 25 cents for every $1 increase in prices e) prices will rise 25 cents for every $1 increase in wages
Which of the following track the average prices received by producers?
What will be an ideal response?
Which of the following will reduce the velocity of circulation of the money stock?
A. The inflation rate increases. B. The interest rate falls. C. Credit cards are used more frequently. D. More employees are paid once a week instead of once a month.