Fiscal policy to solve short-run economic problems supports the Keynesian notion of
A) there being no government role in the economy. B) the need for autocratic rule.
C) an active government role in the economy. D) the long-run nature of the economy.
C
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The Federal Reserve can increase the money supply by:
A. reducing reserve requirements. B. increasing the discount rate. C. conducting open market sales. D. eliminating deposit insurance.
If two variables both increase at the same time or decrease at the same time, they are
A) unrelated to each other. B) positively related. C) negatively related. D) conversely related.
"A single-price natural monopoly that is regulated to set price equal to marginal cost incurs an economic loss." True or false? Explain
What will be an ideal response?
As an economist working for a U.S. government agency you determine that a particular country has a sacrifice ratio of 3 . Policy-makers in that country are thinking of lowering the inflation rate from 10% to 4%. Is this sacrifice ratio higher or lower than the typical estimate? From your numbers, what is the amount of output that will be lost for this country to reduce its inflation rate?
a. The sacrifice ratio is higher than the typical estimate. It will cost 30% of annual output to reach the new inflation target. b. The sacrifice ratio is higher than the typical estimate. It will cost 18% of annual output to reach the new inflation target. c. The sacrifice ratio is lower than the typical estimate. It will cost 30% of annual output to reach the new inflation target. d. The sacrifice ratio is lower than the typical estimate. It will cost 18% of annual output to reach the new inflation target.