Refer to Figure 26-8. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) lower interest rates. B) raise interest rates.
C) raise income taxes. D) lower income taxes.
B
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According to the factor price equalization theorem, free international trade will result in wages equating rents worldwide
Indicate whether the statement is true or false
A strategic pre-commitment occurs when a firm:
A. commits to some actions before rivals take theirs, with the aim of increasing its future competitive profit. B. commits to some actions after rivals take theirs, with the aim of increasing its future competitive profit. C. commits to some actions before rivals take theirs purely by accident. D. commits to some actions after rivals take theirs because there are no other options.
A small open economy
A) is unable to affect the world real interest rate by its borrowing and lending decisions. B) will always be a net borrower from abroad. C) will always be a net lender abroad. D) is almost never able to borrow abroad.
Taxes on emissions have
A. led to firms discovering costless methods of extraction of pollutants from liquid discharges. B. led to increased waste disposal of pollutants. C. led to voluntary reduction in emissions to avoid the taxes. D. not been an efficient penalty. Firms continue to pollute.