Which of the following statements is true?
A) Nonactivists argue that monetary and fiscal policies should be deliberately used to smooth out the business cycle.
B) Fine-tuning consists of the usually frequent use of monetary policy to counteract even small undesirable movements in economy activity.
C) Keynesians would be more likely to advocate contractionary monetary policy to correct an inflationary gap than expansionary monetary policy to correct a recessionary gap.
D) b and c
E) a, b and c
B
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The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA) will
A) increase federal government spending by about $2 trillion over 10 years. B) cost the government significantly more than the additional taxes and fees enacted under the law will bring in. C) actually reduce government spending over a 20 year period. D) eliminate the budget deficit within 10 years.
Just after a cyclical trough, given the excess capacity in the economy, there should be an unusually ________ rate of closing the gap between desired and actual capital stocks, making net investment respond relatively ________ to rising sales
A) high, strongly B) high, weakly C) low, strongly D) low, weakly
The purpose of the Temporary Assistance to Needy Families program is
A) to provide rebates of Social Security taxes to low-income workers. B) to provide cash assistance and supportive services to assist the family, helping them achieve economic self-sufficiency. C) to provide a minimum income for the aged, blind, and the disabled. D) to supplement Social Security for the elderly with medical problems.
In the long run,
a. continuing budget surpluses cause interest rates to fall, thereby stimulating investment spending b. any deviation from a balanced budget will plunge the economy into recession c. there can be no economic growth unless the government's budget is in surplus d. there can be no economic growth unless the government's budget is balanced e. government spending must increase as a fraction of GDP