A cold winter will increase the quantity of heating fuel demanded at every price
a. True
b. False
Indicate whether the statement is true or false
True
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In a recession, the Fed's monetary policy aims to ________ the real interest rate, ________ aggregate demand, and ________ aggregate supply
A) decrease; increase; increase B) decrease; increase; not change C) increase; not change; increase D) increase; increase; increase E) increase; decrease; not change.
Which of the following is an important assumption about the labor market that is shared by both the original Keynesian model and the Friedman "Fooling Model?"
A) The supply of labor depends on expected real wages. B) The demand for labor is a function of nominal wages. C) Workers can be "off" their labor supply function in the short-run equilibrium. D) Firms can be "off" their labor demand function in the short-run equilibrium.
Recognition lag is the time it takes for policymakers to recognize the existence of an economic expansion or a recession
a. True b. False Indicate whether the statement is true or false
The Federal Reserve Bank can ________ and the government can ________ to stimulate aggregate demand in the economy.
A. lower interest rates; increase spending B. lower interest rates; decrease spending C. increase interest rates; decrease spending D. increase interest rates; increase spending