Which of the following government actions is most likely to stimulate the economy:
A. Raising the prime interest rate
B. Lowering tax rates
C. Printing less money
D. Borrowing more money
B. Lowering tax rates
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The Fed would be pursuing a contractionary monetary policy if it was
A) selling bonds in the open market. B) lowering the differential between the discount rate and the federal funds rate. C) selling dollars in foreign exchange markets. D) lowering the reserve requirement.
When a government program is justified not on its merits but on the number of jobs it will create,
a. the program is an efficient use of taxpayer dollars. b. it should be approved only if the unemployment rate is low. c. taxes should be raised to fund the program. d. it is known as the "broken window fallacy.".
Which of the following does not affect the wages a worker earns?
a. natural ability b. effort c. chance d. All of the above affect the wages a worker earns.
Predatory pricing occurs when a monopolist charges a:
A. price above average total cost. B. price above average variable cost. C. low price to drive out competition, then charges a high price. D. high price to drive out competition, then charges a low price.