What monetary policy should be implemented to correct an inflationary economy?
(A) Easy monetary policy
(B) Money creation policy
(C) Tight monetary policy
(D) Laissez faire policy
Answer: (C) Tight monetary policy
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Which of the following best illustrates the use of discretionary fiscal policy?
a. Congress providing $1 billion in relief aid for hurricane victims b. Congress appropriating $400 million to help the needy and the appropriation being financed by a tax on wealth c. Income tax receipts being smaller because of a decline in real GDP during a recession d. The Federal Reserve tightening credit when it receives news of accelerating inflation e. Congress passing a bill authorizing $2 billion in additional spending when it receives news of a deepening recession
Suppose that Makemoney Movies produces two new films — The Hulk and The Piano. Makemoney offers theaters the two films together at a single price but will not supply the movies separately. What do economists call this business practice?
a. predatory pricing b. resale price maintenance c. tying d. leverage
On a production function, as capital per worker increases, output per worker
a. increases. This increase is larger at larger values of capital per worker. b. increases. This increase is smaller at larger values of capital per worker. c. decreases. This decrease is larger at larger value of capital per worker. d. decreases. This decrease is smaller at larger value of capital per worker.
Points that lie below the production possibilities curve are inefficient because:
A. too many goods are being produced. B. producers face scarcity. C. producing more of one good means producing less of the other. D. more of one good could be produced without producing less of the other.