Monetarists advocate that the
A. money supply should be increased during inflation and reduced during recession.
B. money supply should be reduced during inflation and increased during recession.
C. money supply should be increased by a constant rate year after year.
D. counter cyclical approach to fiscal policy be adopted.
C. money supply should be increased by a constant rate year after year.
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
One reason why the price elasticity of supply for DVD players is greater than one is that
A) the cost of producing DVD players is small. B) the storage of DVD players is not possible. C) DVD players can be easily stored. D) the demand for DVD players is fairly large. E) DVD players require relatively advanced technology for their production.
Why do companies practice price discrimination?
(A) Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (B) Price discrimination allows companies to defend an illegal monopoly against free market competition. (C) Price discrimination enables companies to charge all consumers the same price for a good or service. (D) Price discrimination provides individual producers with an advantage in perfectly competitive markets.
Automatic fiscal policy instruments include
A) Government contracts. B) Regressive income tax rate schedule. C) Unemployment compensation. D) None of the above.