When aggregate demand is too low to ensure full employment, those in favor of using monetary and fiscal policy to stabilize the economy might recommend
a. cutting government spending.
b. raising taxes.
c. having the Fed purchase government bonds.
d. reducing the money supply.
c
You might also like to view...
All of the following are true statements about the multiplier except
A) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation and the interest rate. B) The larger the MPC, the larger the multiplier. C) The multiplier is the ratio of the change in real GDP to the change in autonomous expenditure. D) The multiplier makes the economy less sensitive to changes in autonomous expenditure.
The amount of output lost when the inflation rate is reduced by one percentage point is called
A) Okun's law. B) the sacrifice ratio. C) the Solow residual. D) Planck's constant.
The national debt is the amount of ________.
Fill in the blank(s) with the appropriate word(s).
The merits of a patent system include:
A. the patent system gives firms strong incentives to take the risk of substantial research and development costs. B. the patent system may precipitate the development of new products. C. granting monopoly power through a patent may be beneficial from society's perspective. D. All of these.