In combating stagflation, a government-induced:
a. increase in aggregate demand would help reduce inflation but aggravate unemployment.
b. decrease in aggregate demand would help reduce unemployment but aggravate inflation.
c. increase in aggregate demand would help reduce unemployment but aggravate inflation.
d. decrease in aggregate demand would help reduce both unemployment and inflation.
e. increase in aggregate demand would help reduce both unemployment and inflation.
c
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Do Keynesians and classicals agree on the effectiveness and desirability of macroeconomic stabilization? Briefly explain
What will be an ideal response?
Figure 14-6
In the situation shown in , how could the Fed return the economy to potential output?
a.
decrease government spending
b.
increase taxes
c.
decrease taxes
d.
shift to a more restrictive monetary policy
e.
shift to a more expansionary monetary policy
In theory, the representative firm in monopolistic competition earns only a normal profit. Why might that outcome not always occur in the real world of small firms?
What will be an ideal response?
Ajax Corporation has just decided to let managers work from home one day a week. This decision will make working conditions better and will
A. lead to an increase in the supply curve of labor for managers. B. increase the elasticity of demand for labor for managers. C. leave the supply curve of labor unchanged. D. cause the demand curve for labor for managers to increase.