Once monetary policy is dedicated to controlling the level of nominal GDP, then fiscal policy can be used to
A) choose the overall level of interest rates, with a high budget surplus implying a high level of interest rates.
B) choose the overall level of interest rates, with a high budget deficit implying a high level of interest rates.
C) control the level of inflation, with a high budget surplus implying a faster rate of inflation.
D) control the level of inflation, with a high budget deficit implying a faster rate of inflation.
B
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What will be an ideal response?
General equilibrium analysis:
A. is the study of competitive equilibrium in many markets. B. illustrates the dependence among markets. C. concerns competitive equilibrium in a single market, considered in isolation. D. was pioneered by Nobel laureate Vernon Smith.
An economy is statically efficient if it is operating:
a. On its production possibilities frontier b. On its Lorenz Curve c. On its Friedman curve d. On its Samuelson curve e. All of the above
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a. True b. False Indicate whether the statement is true or false