According to classical economists, in recessions, the government should
A) stimulate the economy to increase demand.
B) actively use fiscal policy to combat the recession.
C) increase the minimum wage so that poor people will be able to afford necessities.
D) eliminate barriers to labor market adjustment, such as burdensome regulations on businesses.
D
You might also like to view...
Which of the following is a characteristic of a competitive market?
a. There are many barriers to entry. b. Firms sell differentiated products. c. Buyers and sellers are price takers. d. There are many buyers but few sellers.
Suppose the economy is in an equilibrium in which real GDP is less than potential GDP. To increase real GDP, the government can use a fiscal stimulus of
A) increasing taxes only. B) decreasing government expenditure only. C) decreasing taxes and/or increasing government expenditure. D) decreasing government expenditure and simultaneously increasing taxes. E) increasing the quantity of money.
The Board of Governors of the Federal Reserve does each of the following, except
A. sit on the Federal Open Market Committee. B. serve on the Board at the pleasure of the President, who can make individual governors resign at any time. C. carry out monetary policy. D. raise and lower reserve requirements.
Adolph Berle and Gardiner Means argued that widely held corporations will be run inefficiently by professional managers. Yet large, publicly-traded corporations continue to produce the bulk of the free world's output. A widely held corporation survives because:
A. ownership and control are separate. B. its size insulates it from market competition. C. large corporations are given tax sops by the government. D. it can raise capital from diversified investors.