Many economists believe that if fiscal policy turns contractionary to reduce the deficit,
A. monetary policy can turn expansionary to counteract the effects on aggregate demand.
B. monetary policy must be contractionary to reinforce the good effects of contractionary fiscal policy.
C. foreign investment in the United States must be encouraged.
D. taxes on the earnings from stock market gains should be increased.
Answer: A
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In the long run, both monopolistically competitive and perfectly competitive firms attain
A) lowest cost production. B) positive economic profits. C) zero economic profits. D) productive efficiency.
In 2009, household spending was the smallest component of total spending in the U.S. economy
a. True b. False Indicate whether the statement is true or false
If the Fed buys securities on the open market, this will
A. reduce banks' excess reserves. B. increases banks' excess reserves. C. lower the reserve requirement. D. contract the money supply.
Economists contend that most economic decisions are:
A. random. B. chaotic. C. spontaneous. D. purposeful.