Assume the economy is operating at a real GDP above full-employment real GDP. Keynesian economists would prescribe which of the following policies?
A. nonintervention
B. fixed rule
C. contractionary
D. expansionary
Answer: C
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When the government passes a law making a particular good illegal, does it matter for the black market price and quantity if the penalties for breaking the law are imposed on the buyers or on the sellers?
What will be an ideal response?
Half of all your potential customers would pay $10 for your product but the other half would only pay $8 . You cannot tell them apart. Your marginal costs are $4 . If you set the price at $8, the expected profit is:
a. $3 b. $4 c. $5 d. $6
When the Federal Reserve System was first established, which of the following was its chief responsibility?
a. Keeping the inflation rate low and stable b. Ensuring the stability of the banking system c. Achieving full employment of the labor force d. Keeping the interest rate low and stable e. Keeping output growth high and stable
The demand for dollars in the foreign exchange market
A. Depends on U.S. demand for foreign goods and services. B. Depends in part on the foreign demand for U.S. goods. C. Is represented by a point in a diagram of foreign exchange supply and demand. D. Is the ratio of the dollars demanded to the amount of foreign currency supplied.