Nonactivists hold that
A) activist monetary policies are likely to be destabilizing rather than stabilizing.
B) economic fine-tuning is quite feasible.
C) flexibility in wages and prices is sufficient to allow the economy to return at a reasonable speed to full-employment output.
D) a and c
E) all of the above
D
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Which of the following is a potential operating instrument for the central bank?
A) the monetary base B) the M1 money supply C) nominal GDP D) the discount rate
A market in which resources are traded is known as a(n)
a. factor market b. perfectly competitive market c. open market d. closed market e. equilibrium market
The proposition that an increase in the federal budget deficit caused entirely by a current tax cut has no effect on aggregate demand is called the
A) Ricardian equivalence theorem. B) interest rate effect. C) indirect effect. D) open-economy effect.
Moral hazard is more likely to arise when:
A. one side of an economic relationship cannot observe the behavior of those on the other side. B. adverse selection is present. C. insurance policies have high deductibles. D. people are uninsured.