Keynes argued that if the economy is in a severely depressed state then __________ is constant
A) real GDP
B) the price level
C) velocity
D) nominal GDP
A
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If the objective of economic policy is to decrease the amount of pollution by an industry in the long run, the
A. most effective policy action would be a subsidy to firms for the reduction of emissions. B. most effective policy action would be a tax on polluting firms. C. appropriate course of action for government is to do nothing. D. appropriate course of action for government is to increase R&D outlays to develop technology to remove the emissions from the environment.
A balanced budget would not affect income because an increase in government spending is exactly matched by an increase in taxes
a. True b. False Indicate whether the statement is true or false
During 1929-1933, monetary policy was
a. highly expansionary and this led to an increase in the general level of prices. b. characterized by steady monetary growth, which resulted in price stability. c. characterized by a sharp reduction in the supply of money, which led to downward pressure on prices and a decline in output. d. highly expansionary and this led to a reduction in the general level of prices.
If you were going to write a function for money demand, you would say that the demand for money holdings:
A. varies inversely with both the nominal interest rate and nominal income. B. varies inversely with nominal income and directly with the nominal interest rate. C. varies inversely with the nominal interest rate and directly with nominal income. D. varies directly with both the nominal interest rate and nominal income.