A political problem with discretionary fiscal policy is the
A. ability of powerful politicians to direct government spending to their favored causes.
B. business cycle.
C. Federal Reserve.
D. split control of the legislative and judicial branches of government.
Answer: A
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Which of the following does NOT describe the intended purpose of the antitrust laws of the United States?
A) to promote competition within the economic system B) to reduce the power of monopolies C) to prohibit certain economic activities that promote trade D) to restrict the formation of monopolies
How have insights from the field of psychology influenced the thinking of economists in recent years?
A price above the equilibrium price will:
A) result in quantity supplied being less than quantity demanded. B) result in a shortage. C) create pressure for price to fall. D) tend to rise over time.
Which of the following will NOT happen when the Federal Reserve buys bonds from the public in the open market and cash in the hands of the public does not change?
A. The required reserve ratio will increase. B. The money supply will increase. C. The deposits of commercial banks will increase. D. Commercial bank reserves will increase.