Suppose the economy is producing above potential GDP and the Federal Reserve implements the appropriate change in monetary policy, but not until after the economy has started to slow down on its own. In this situation there is a real danger that
A) the Fed's expansionary policy will result in too small of an increase in GDP.
B) the Fed's expansionary policy will result in too large of an increase in GDP.
C) the Fed's contractionary policy will result in too large of a decrease in GDP.
D) the Fed's contractionary policy will result in too small of a decrease in GDP.
C
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What is the “right” degree of abstraction necessary to analyze an economic problem?
A. Simple abstraction of only minor details B. Simple abstraction of only irrelevant details C. Total abstraction of all variables D. Total abstraction of all irrelevant details E. There is no “right” degree of abstraction to analyze an economic problem.
Describe the criticisms about decision making at the IMF and the World Bank
Which types of policies are thought to reflect bias? What types of costs are not considered? What is the fundamental question critics raise about the operations of the international governmental economic institutions?
During a boom expansionary economy, public assistance payments and unemployment compensation payments automatically decrease while income taxes automatically increase. Which of the following best describes the effect of these changes on aggregate demand? a. Aggregate demand will be less than it would be without these automatic stabilizers. b. Aggregate demand will be the same as it was before
the expansion. c. Aggregate demand will be less than it was before the expansion. d. none of the above
When there is an external benefit, the unregulated market
A. overproduces the good or service. B. reaches the most efficient solution. C. maximizes public welfare. D. underproduces the good or service.